No respite as decline in output quickens
Business activity in the Northern Ireland private sector fell at the fastest rate for four months in May, with the rate of decline quickening for the second month in a row, a survey has reported.
New export orders also fell at a faster rate with the latest reduction the sharpest for a year at 40%.
The latest Ulster Bank Northern Ireland Purchasing Managers' Index, produced by Markit, said that the decrease in output was linked to falling new business.
The report showed that the level of new orders received by Northern Ireland private sector firms fell markedly during May.
New export orders also fell at a faster rate, with the latest reduction the sharpest for a year. Reduced demand from the Republic of Ireland was cited as having contributed to the steep decline in new export orders.
Richard Ramsey, chief economist at Ulster Bank, said that it is not surprising that Northern Ireland's manufacturing performance also deteriorated last month, in line with UK figures. "Indeed, local manufacturing output and new orders fell for the first time in three months with the pace of decline more significant than that experienced in the UK as a whole," he said.
"Meanwhile, manufacturing firms reported the sharpest decline in employment levels in nine months.
"This contrasts with a robust rate of job gains in the UK manufacturing sector.
"It is widely recognised that Northern Ireland needs to rebalance its economy with one key aspect of this requiring a step-change in export performance, across all sectors.
"The latest survey puts the scale of this challenge into sharp focus with local firms reporting a steep contraction in new export orders in May.
"Last month's figures marked the fastest rate of decline in 12 months with 40% of firms signalling a decline in export orders."
Ramsey added: "Looking at the private sector as a whole, it is noted that last month the UK economy celebrated its second anniversary of its economic recovery. Conversely, a private sector recovery has yet to take hold in Northern Ireland.
"This highlights the need to tailor radical regional policies to address Northern Ireland's long-term economic problems."