Hopes for recovery as activity fall slows
Business activity in Northern Ireland fell at its slowest rate since December 2009, a new report has claimed.
February data from the latest Northern Ireland Purchase Managers Index, produced for Ulster Bank by Markit, has indicated a further reduction in the private sector activity here, but showed that the rate of contraction eased to the slowest in 15 months.
This was indicated by a rise in the seasonally adjusted Business Activity Index from 43.8 to 47.6.
Activity levels fell across all four sectors monitored by the survey, with construction recording by far the sharpest reduction.
Staffing levels fell in February, extending the current period of decline to three years.
However, the rate at which job cuts were implemented continued to slow, with the latest decline the weakest since May 2010.
Payrolls fell in three of the four monitored sectors, with manufacturing the exception. However, even here, the rate of job creation was only marginal.
The rate of input cost inflation in the Northern Ireland private sector was strong in February, and faster than that seen across the UK economy as a whole. The latest increase extends the current period of inflation to two years.
Meanwhile, service providers and construction firms continued to lower their charges on average.
Richard Ramsey, chief economist for Ulster Bank, said that there are signs of encouragement, with the pace of decline in some areas improving dramatically.
"The biggest improvement, in terms of output and new orders, was within the services sector," he said. "Business output within the service industry was basically flat, its best reading since November 2009.
"Furthermore, the continued growth within the UK as a whole, alongside the rebound in business activity in the Republic, should benefit an increasing number of firms here in due course.
"Employment levels within Northern Ireland's private sector firms declined for the 36th consecutive month in February.
"That said, the pace of job losses eased significantly relative to January and was the weakest since May last year.
"The local manufacturing industry, however, bucked this wider trend and was the only sector to report an increase in staffing levels last month.
"The other key challenge facing local businesses is inflation."