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Northern Ireland economy on rise but pace of growth slowing, says bank

By John Mulgrew

Published 14/07/2015

Northern Ireland economy on rise but pace of growth slowing, says bank
Northern Ireland economy on rise but pace of growth slowing, says bank
Ulster Bank chief economist Richard Ramsey

Northern Ireland's economy continued to witness growth at the end of the first half of the year, buoyed by a boost in new work and orders.

And as the first six months comes to an end, "it is clear the first half of the year ended much more positively than it started", said Ulster Bank's chief economist Richard Ramsey.

But while businesses reported boosts in output, orders and exports in June, the "pace of growth in business activity was marginally weaker than that recorded in May and remained below the pre-downturn, long-term average," according to the Ulster Bank's latest purchasing managers index.

Mr Ramsey said that, more worryingly, firms had hired new staff at their lowest levels since January. "In particular, the services sector failed to record employment growth last month for the first time in two years," he added.

That includes everything from retail to hotels and the restaurant industry.

But Northern Ireland still continues to lag behind the fortunes of the rest of the UK, with recovery since the recession still markedly lower. "The rate of growth in activity at companies in Northern Ireland remained much slower than the UK economy average," the report said.

Last month, Scotland was the only region which saw lower growth levels.

"While the economic recovery is not as robust as we would like it to be, it is nevertheless encouraging to note that firms are still in expansion mode," Mr Ramsey said.

"The private sector now has more momentum going into the second half of the year than it had a few months ago."

Meanwhile, manufacturing and service sectors saw a boost in levels of activity in June, but construction and retail companies witnessed a slump once again.

Firms right across the sectors raised their costs last month, and that ended a nine-month sequence of falling charges.

Companies across Northern Ireland also saw their order books grow at their fastest rate since September last year.

"The forward-looking new orders index offers some encouragement that the return to positive growth that occurred in the second quarter can be maintained in the third quarter," Mr Ramsey said.

"The manufacturing, services and retail sectors all reported robust rates of orders growth, with retailers posting their first increase in nine months.

"Growing demand should also support further job creation in the months ahead."

And it is the UK market that is helping businesses here, with Britain the "most buoyant source of demand for local firms".

But the strength of sterling against the euro continues to be a burden for businesses, acting as a "drag on export performance".

Belfast Telegraph

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