Retailers report sharp decline in trading activity just ahead of all-important Christmas shopping period
Business activity in Northern Ireland has fallen for the first time in 16 months, according to a new report.
Retailers reported a particularly sharp decline in October, just months ahead of the crucial Christmas shopping period.
The figures were revealed in today's purchasing managers index report from Ulster Bank.
While Northern Ireland companies continued to increase their staff levels during October, it was at the slowest rate since last November.
Richard Ramsey, chief economist with Ulster Bank in Northern Ireland, said the slowdown was not unexpected and that growth in business activity and new orders still compared favourably with long-term averages.
"All sectors saw a slowdown, however this was most marked within the services and retail sectors," he said.
"Indeed, local retailers were the only sector to report an outright decline in business activity.
"It remains to be seen if this is just an adjustment following record rates of growth mid-year, or something more significant.
"In this respect, the next couple of months will be telling, as we enter the all-important Christmas period."
Mr Ramsey said that the construction and manufacturing sectors continued to experience the strongest rates of growth thanks to the strong markets in Britain and the Republic.
He added that the price of oil and other commodities had contributed to the lowest rise in input costs since June 2012.
"The easing of cost pressures has filtered through to the price of goods and services as well, with manufacturing and retail actually seeing their prices fall," he said.
He added: "Indeed, retail prices are falling at their fastest rate since June 2009, which suggests strong competition and heavy discounting."
In a wider context, the growth of output at Northern Ireland companies was slower than the UK economy average and new orders rose at the weakest pace for a year.
UK-wide statistics for September showed that retail sales fell, partially due to unseasonably warm weather.
Store sales volumes fell by 0.3% in September compared to the month before, according to the Office for National Statistics.
The worst performers were in clothing, textile and footwear sales.