Belfast Telegraph

Economy 'stabilises' but growth still elusive

By Heather McGarrigle

Northern Ireland's economy steadied last month but has shown no growth for four years, according to the latest Ulster Bank purchasing managers' index.

The monthly report recorded no change in private sector business activity in November, bringing an end to a 23-month period of contraction.

However, there has been no "outright expansion of output" for four years.

Firms reported higher employment levels last month for the first time since February 2008, driven largely by manufacturing firms - the only sector to record activity growth during the survey period.

Retailers also increased staff levels in preparation for Christmas - the first rise since March 2008 - but construction and services firms continued to shed staff.

Average costs rose for business, with input cost inflation rising to a five-month high, but most kept their own prices unchanged in an effort to remain competitive.

Ulster Bank's chief economist Richard Ramsey noted that since the global economic recovery began in 2009, most international PMIs have "broadly followed the same path".

He pointed out a marked global slowdown following uncertainty in the eurozone, with many economies showing contraction.

Mr Ramsey said: "As far as the Northern Ireland PMI is concerned, it certainly did not follow the herd in terms of the post-2009 recovery.

"Equally, however, over the last few months it has been bucking the wider trend with its business activity index rising as opposed to falling.

"Local manufacturing firms reported their sharpest rise in output since February 2007, which compared to contraction in the UK.

"Of more concern is the continued divergence within the local construction and services industries."

The survey is the latest gloomy report on Northern Ireland's economy.

Last week, Department of Finance and Personnel figures revealed export sales to the Republic of Ireland fell by 19% in the financial year 2010 to 2011.

In the same week, British Retail Consortium figures showed like-for-like sales on the high street in November were down 1.6% on last year.

19%

The amount export sales fell from Northern Ireland to the Republic

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