NI still in recession as firms feel pinch
Published 11/07/2011 | 08:00
Green shoots of recovery are in short supply in Northern Ireland, according to a survey of businesses out today showing 19 successive months of falling activity.
The Ulster Bank purchasing managers' index fell from 46.5 to 44.3 in June, the steepest drop in nearly six months.
One in three businesses experienced a fall in new business while new orders in retail were at their lowest in two years.
Overall, private sector employment fell at its fastest rate in seven months.
Ulster Bank chief economist Richard Ramsey said that with a rate of 44, the province could technically be described as still in recession.
But he added: "It's not the breakneck pace of contraction which we saw in 2008 when the rate was 30.4."
Compared to the UK's rate of 53.1, there is still downturn in the economy - and Mr Ramsey said he did not expect meaningful recovery in the near future. "We will be bumping along the bottom for quite some time."
Big manufacturing firms with healthy export business, such as Norbrook, FG Wilson and Wrightbus, did report higher levels of new business in the survey, but small firms who had depended on the Republic did not have good news to report.
Northern Ireland's economic deterioration was also out of step with the Republic and the rest of the UK.
"Last month saw a modest acceleration in private sector output growth in the UK, whilst business activity within the Republic of Ireland remained broadly flat," Mr Ramsey said.
"Northern Ireland firms, however, reported a pick-up in the pace of decline in both output and employment levels in June. This was evident across the services, retail and construction sectors. Manufacturing remains the best performing sector."
Mr Ramsey said job losses in the service sector were mainly felt in hotels and restaurants though he forecast further job losses as public sector cuts start to bite.
But he said there was a silver lining to be detected in the easing of the rate of decline in new orders. Despite the job losses, new orders in the services sector were at their healthiest in over three years.