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Rate of slowdown in the Northern Ireland economy is the sharpest of any region in UK

By Margaret Canning

Published 13/06/2016

Ulster Bank chief economist Richard Ramsey
Ulster Bank chief economist Richard Ramsey
A graphic showing some of the findings in the Ulster Bank survey

Growth in the Northern Ireland economy was sluggish during May, with a marked fall in activity for construction firms, a major survey by Ulster Bank reveals today.

The purchasing managers index (PMI) said there was only slight growth in the economy during the month - and the rate of slowdown was the sharpest of any UK region.

For the first time since February, growth was slower than the UK average.

And a reduction in construction activity in the UK was leading to a steep slump in business in that sector in Northern Ireland, as large numbers of Northern Ireland builders depend on contracts in Great Britain.

In fact, the survey said the fall in activity in construction was the sharpest in more than three years.

But both retail and services sectors - the latter covering everything from restaurants to estate agents - reported higher activity and growing employment.

But both manufacturing and construction reported falls in employment and activity - though new orders for manufacturers were at their highest in 10 months, suggesting that output could pick up.

Ulster Bank chief economist Richard Ramsey said: "Overall, business activity is rising albeit at a subdued rate, and it is the Northern Ireland construction sector that provides most cause for concern.

"This slowdown is likely to continue into the third quarter of the year, but much will depend on macro issues, including the performance of the UK economy, and the forthcoming referendum on the UK's membership of the EU."

Mr Ramsey said input prices rose sharply in May, as the new National Living Wage continued to weigh on employers. Other firms also commented on the effects of higher fuel prices.

And he said the rates of growth in business activity, new orders and employment were well below rates of growth recorded during the downturn.

A survey from the Construction Employers' Federation (CEF) and PwC NI last week pointed to a fall in numbers of construction companies working in Great Britain.

Belfast Telegraph

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