Northern Ireland firms outperform rest of UK due to uncertainty over EU
Northern Ireland business is making the most of uncertainty around the EU referendum with output at an 18-month high, according to a major survey today.
The Ulster Bank purchasing managers' index (PMI) said the province enjoyed the fastest growing rate of business activity of any UK region during March.
The services sector - everything from law firms to restaurants - was especially buoyant, the survey said.
However, manufacturers reported only marginal growth during the month and was the only sector shedding jobs.
But overall, companies had closed the first quarter of the year "on a high", with employment and new orders growing. And far from slowing business activity, Ulster Bank chief economist Richard Ramsey said uncertainty around June 23's EU referendum - and the fall in sterling's value it had prompted - was in fact presenting opportunities for Northern Ireland firms.
"The marked depreciation in sterling over the last four months, linked to uncertainty with the outcome from the forthcoming EU referendum, has provided a significant and unexpected tailwind for local exporters and retailers sensitive to cross-border footfall.
"Given Northern Ireland's reliance on the Republic of Ireland economy, the combination of strong growth in the Irish Republic coupled with a competitive sterling/euro exchange rate have presented many firms with very favourable conditions.
"It is noted that local firms also increased their staffing levels in March for the 14th month in a row."
And Northern Ireland's economy was no longer the poor relation to other UK nations, Mr Ramsey said.
In fact, output and employment growth here outperformed the rest of the UK throughout the whole quarter - but Mr Ramsey added: "It is worth remembering that the local economy is playing catch-up with its UK counterparts following a sustained period of under-performance."
He said the services and retail sectors were "star performers" with both reporting a revving-up in output, orders and jobs during March. New orders were increasing in the services sector at the fastest rate in nearly two years - while retail could claim the steepest jobs growth.
But shops were engaged in close competition, with prices being reduced at their fastest rate in seven years.
Mr Ramsey added: "Outside of services and retail, construction firms remain in expansion mode.
"However, the rate of growth in output, orders and employment has eased."
But the struggles continued for manufacturing. Last year Michelin announced it was withdrawing completely from Northern Ireland, due to high energy prices and cheap Chinese tyre imports. And there was no improvement in March.
"Output was flat ... although there was a modest pick-up in manufacturing orders. However, manufacturing continues to report job losses, the only sector to do so, with March representing the seventh successive month of employment declines," he added.