Firms feel financial chill after big freeze
The big freeze resulted in the steepest fall in business activity in Northern Ireland for seven months, a new report revealed today.
The coldest January in decades led to a marked reduction of client demand as consumers battened down the hatches and stayed indoors, according to the Ulster Bank Northern Ireland purchasing managers index (PMI).
Over 40% of respondents to the survey reported a decline in output during the month, the highest proportion since June.
The slump in business in turn led to job cuts with the survey recording its 23rd month of reduced employment in a row.
Ulster Bank chief economist Richard Ramsey said the survey had trashed expectations of modest growth in early 2010 after the province’s private sector output stabilised in the last few months of 2009. The survey also exposed a contrast between business activity and new orders performance between here and the UK. The gap was the widest since the survey began in August 2002.
But Mr Ramsey added: “The January figures should be treated with a degree of caution as performance was partly masked by the unusually bad weather conditions which exacerbated already challenging economic conditions.
“Arguably, these conditions affected Northern Ireland more than the UK as the bad weather limited the inflow of Republic of Ireland shoppers. As a result, local retailers reported a sharp decrease in footfall.
“The February figures will be eagerly awaited as they will confirm whether or not January’s disappointing figures were a one-off.”
The survey also raised concerns about the jobs market as employment in Northern Ireland businesses fell more quickly than the UK average for the first time in eight months.
Official figures showed the UK economy emerged from recession in the fourth quarter of 2009.
Northern Ireland’s private sector output also stabilised in the fourth quarter of 2009 and Ulster Bank had anticipated this would lead to modest growth in the PMI survey at the start of this year. However, the latest survey has perhaps temporarily poured cold water on these expectations.