Retailers leading way as private sector firms enjoy another month of growth
Northern Ireland businesses are weathering the vote for Brexit amid an increase in economic activity for the sixth month in a row, a new report has said.
The bulk of private sector firms saw a rise in business, albeit at a slower pace than the UK as a whole, according to the Purchasing Managers' Index (PMI) with Ulster Bank, for March.
It says an increase was led by retail, followed by the services sector. Business activity stood at 53.9, where 50 means no change.
The construction and manufacturing sectors had "modest expansion" last month, while there was a "solid increase" in employment numbers.
Firms reportedly took on extra staff in line with the launch of new products and efforts to expand operations. All four sectors saw increases in jobs. But increased input costs remain "substantial" and are also pushing up the cost of goods and services.
Construction and services firms saw their cost-base accelerate, with the latter rising to a 70-month high.
"The increase in input prices at Northern Ireland companies remained faster than the UK average," the report said.
Ulster Bank chief economist Richard Ramsey said that, nine months on from the UK's vote to leave the EU, "Northern Ireland's private sector has maintained its growth momentum as it enters the second quarter".
"Overall, the local economy has perhaps fared better than expected post the Brexit decision, with the main impact so far being the weakening of sterling," he added.
But, he said the "long-term economic implications will only become apparent as what Brexit actually means becomes clear".
"Again, inflationary pressures are very prevalent, with the effects of sterling's weakness continuing to feed through into input costs, and the prices they charge to customers. Retail and manufacturing input cost inflation eased from record highs, but remain very elevated," he said.
Economic growth, however, was outpaced by a number of other UK regions including London, the North East and West Midlands.
"While the negative effects of the weak sterling are very apparent in the latest data, so are the positives, with exports continuing to grow strongly, albeit at a slower rate, and cross-border shopping boosting retail," Mr Ramsey said.
He said a key concern is the "dependence on retail sector growth in an environment of rising prices and pressure on consumers' pockets"
"Retail prices are rising at almost a record rate, with further rises in food and energy prices set to filter through in the coming months," he added.