Manufacturing growth for economy
Published 11/03/2013 | 04:20
Activity in the Northern Ireland economy continued to contract last month but there are some signs of hope emerging from the manufacturing sector.
That was the theme of the latest Ulster Bank Northern Ireland PMI (Purchasing Managers' Index) report which revealed reductions in the level of output, new orders and employment in February, mostly led by slowing construction and services sectors.
Manufacturers, however, had a more prosperous month, registering a second consecutive month of growth and the fastest rise in output in 14 months.
"Northern Ireland's manufacturing firms have certainly started 2013 on a solid footing," said Ulster Bank economist Richard Ramsey, adding currency movements have helped the sector.
"Ongoing sterling weakness is a key factor behind the recent improvement in demand conditions," he said. "Our food and drink sector, which accounts for more than half of all manufacturing sales and one-fifth of exports, is likely to be the main beneficiary of sterling weakness."
Meanwhile, the boost for manufacturing saw the sector increase its staffing levels for the fourth consecutive month.
But it wasn't such a healthy picture in other sectors.
Employment across the board at Northern Ireland companies fell back slightly in February amid reports of reduced workloads and cost-cutting efforts, the PMI said.
And while sterling weakness had helped exporters, it has added to the burden of importers – the weaker pound means Northern Ireland importers have to pay more for goods and services priced in other currencies – and helped push up input cost inflation above that for the rest of the UK.
Overall, the pace of decline in activity in the Northern Ireland economy was "subdued", although we've still some way to go to catch up with the rest of the UK.
Every other UK region apart from Northern Ireland and the north east of England saw economic activity pick up last month and even the Republic saw a rebound into growth territory.
The PMI index for Northern Ireland stood at 48.4 last month, the lowest of all UK regions, compared to 52.8 in Wales, the highest ranking region.
The average UK PMI figure was 50.8 while in the Republic the PMI stood at 51.9. A reading above 50 indicates growth in the economy, below 50 shows contraction.