Belfast Telegraph

Saturday 20 September 2014

Manufacturing remains Northern Ireland's star performer as economic update offers some hope

Richard Ramsey, chief economist for Ulster Bank in Northern Ireland
Richard Ramsey, chief economist for Ulster Bank in Northern Ireland

Activity in the Northern Ireland economy is still slowing, but at the slowest rate in the last 16 months. That was the conclusion of the latest PMI report for March from Ulster Bank which offered some crumbs of comfort for the private sector amid a still-difficult economic environment.

Activity increased for manufacturing firms but fell across the other three sectors covered by the survey, a slide driven by a lack of confidence amongst customers.

"The manufacturing sector remains Northern Ireland's star performer," Ulster Bank's chief economist Richard Ramsey (right) said. "Last month manufacturing firms reported their third successive month of rising output and orders. Indeed, manufacturing orders have increased in five of the last six months."

And he said Northern Ireland's manufacturing sector is outperforming its counterparts within the eurozone, including the Republic of Ireland and the UK.

Overall, the picture isn't as rosy with Northern Ireland's still-contracting economy comparing to a pick up in activity in the UK economy as a whole. Northern Ireland, at 47.8, has the lowest PMI reading of all 12 UK regions. A reading below 50 signals a slowdown in activity.

And while the likes of the service sector is still contracting, there is better news to be found. "This sector has been contracting at a rapid rate over the last two years," Mr Ramsey said. "In March, however, the pace of contraction in business activity eased significantly to its slowest rate in two years."

On the downside, there have been steep falls in the backlog of work with companies having to work through outstanding business. And the rate of backlog depletion quickened to the fastest in 2013 so far.

Meanwhile, staffing levels fell for the second successive month, with the pace of reduction slightly faster than in February. The overall decline was driven by the construction and service sectors, while retailers took on extra staff and manufacturers left employment broadly unchanged.

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