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Northern Ireland economy lagging behind rest of UK despite a return to growth

By John Mulgrew

Published 13/04/2015

Ulster Bank chief economist Richard Ramsey
Ulster Bank chief economist Richard Ramsey

Northern Ireland's economy witnessed a slight return to growth in March but continues to lag behind the rest of the UK with a weak euro damaging export sales.

Business activity picked up by a small amount last month, according to the Ulster Bank purchasing managers' index - fuelled mostly by the services sector.

But it did so marginally, with Northern Ireland lagging behind the fortunes of the rest of the UK.

And the construction industry saw the biggest fall in almost two years, while the retail trade also suffered a decline. And currency continues to impact manufacturing exports with "panellists linking the latest reduction to the weakness of the euro compared with sterling", the report says.

Ulster Bank's chief economist Richard Ramsey said: "Northern Ireland's private sector has experienced a rapid recovery and a significant slowdown in less than two years.

"While a moderation in growth was always anticipated, the speed and scale of the slowdown since the fourth quarter of last year was perhaps faster and more marked than had been expected.

"The latest PMI survey shows that local firms reported a decrease in business activity in Q1 2015.

"This represented the first quarterly decline since Q2 2013."

But he said the "albeit marginal" increase in business in March "suggests that private sector demand is at least stabilising".

Meanwhile, more firms took on extra staff last month - with modest job creation across all business sectors, aside from retail. That was fuelled by an increase in new business, with the manufacturing industry witnessing the biggest rise.

All four sectors showed a rise in input costs - with the sharpest increase felt among service providers.

"Northern Ireland's private sector recovery continues to lag significantly behind that of the UK. Scotland and Northern Ireland were the only two regions within the UK to report a decrease in business activity in Q1 2015," Mr Ramsey said.

"Overall, the latest survey suggests some degree of stabilisation within private sector activity following a recent soft patch."

The latest business survey paints a mixed picture for Northern Ireland's business and economic fortunes.

And it comes as a report shows consumer confidence here has reached a seven-year high.

But latest sales for new cars here - used as a barometer of consumer confidence - slumped by 2% last month, while elsewhere saw a continued revving up of sales.

Belfast Telegraph

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