Northern Ireland exports soar after EU vote, but private sector growth stagnant
Exports from Northern Ireland businesses have surged at their fastest rate in 12 years, according to a survey published today.
Sales to outside the region increased significantly in October, with firms attributing the rise to the weakness of the pound against the euro and dollar.
That is according to the latest purchasing managers' index (PMI) from Ulster Bank.
But despite the rise in exports - the sharpest surge since June 2004 - the private sector as a whole only had minor growth during the month, and Northern Ireland remained one of weakest regions of the UK.
Ulster Bank chief economist Richard Ramsey said that the EU vote had been a mixed bag for local companies.
"It has proved to be a mixed blessing for firms," he added. "On the one hand, sterling's weakness against the euro has boosted export price competitiveness.
"Meanwhile, some survey respondents attribute increased uncertainty following the vote as negatively affecting orders.
"Private sector firms increased their staffing levels for the 21st month in a row, albeit the rate at job creation eased and was below the UK average for the first time in 10 months."
Overall, Northern Ireland returned to small growth during October, following a flat September.
The overall increase in business activity was led by the retail sector.
But both manufacturing and services also experienced a small increase.
In contrast, the construction sector suffered a sharp and accelerated decline.
Mr Ramsey said: "The converse however seems to be the case within the construction sector. Given Belfast's crane-cluttered skyline, it would appear that conditions in the local construction market are buoyant.
"However, despite this, and perhaps surprisingly, the PMI points rapid rates of contraction in construction output orders and employment.
"This is largely due to subdued demand within a major external market.
"Perhaps the most significant aspect of the latest survey concerned new orders, and the contrasting performance of the domestic and export markets.
"Overall, incoming orders stagnated in October and have failed to grow since June.
"However, export orders expanded at their second highest rate since the survey began.
"This implies that domestic orders have been contracting at a significant rate."
Mr Ramsey argued that while a weak pound may be positive for exporters, it was "bad news for importers".
Input costs also increased last month to the highest rate since May 2011, with manufacturers and retailers bearing the brunt of the surge.
Employment levels were up in October, due in part to support a growth in output levels.
"Job creation has now been registered in each of the past 21 months," the survey said.
"Only the construction sector reduced staffing levels. The increase in output combined with stagnant new order levels led to a sixth consecutive monthly reduction in backlogs of work.
"That said, the rate of depletion was the slowest in this sequence."
While the overall small expansion in the private sector was "modest", it remained the fastest since June. But the rise in output in Northern Ireland was weaker than the UK average.