Northern Ireland business output soars in April but concern as overheads increase
Output from Northern Ireland business rose at the strongest rate of the year so far during April, a key survey said today.
The Ulster Bank purchasing managers index (PMI) said that, overall, April had brought an encouraging start to the second quarter.
Growth accelerated in export orders, employment and activity, with output soaring at its fastest rate so far this year.
There was growth in new business from outside the UK as the weak pound made Northern Ireland products and services more competitive - particularly in the Republic.
Companies also increased the size of their workforce more quickly than at any point in the last 10 months. But overheads were becoming a concern, with the weakness of sterling making companies' costs higher.
And manufacturers, retailers and service sector firms were all facing costs increases - with retailers' costs growing at the fastest rate in nine years. Firms in the services sector - covering everything from restaurants to estate agents - told the survey their cost base had increased at the fastest rate in six years.
Ulster Bank chief economist Richard Ramsey said a post-EU referendum growth spurt in retail appeared to be drawing to a close. "Retailers have enjoyed a cross-border shopping tailwind since last June. Not surprisingly though the rapid rates of growth in sales activity has eased significantly. The pace of job creation in retailing has also slowed, to its weakest rate since July 2015."
But things looked up for the wider services sector, where he said recovery had been subdued up until now.
"April's PMI survey reveals a marked improvement in conditions. Service sector output hit a 12-month high, while new orders and employment hit 13-month and seven-month highs respectively," said Mr Ramsey.
"Outside of services, manufacturing activity remains relatively buoyant, but construction firms saw activity stagnate and new orders contract in April."
And there was still optimism - though it was less pronounced than in other parts of the UK.
"Despite the ongoing uncertainty with Brexit, private sector firms remain confident about growth prospects for the year ahead. However, they are not as optimistic as their counterparts in Great Britain," he said.