Ulster manufacturers are seeing sparks of recovery
Smalls signs of hope as economy continues to 'bump along bottom'
The bottom line for Northern Ireland's end of year accounts reflected a year of few positive signs of hope, a monthly survey reflected today.
But amid the gloom of a private sector continuing to shrink at a faster pace than the rest of the UK, seeds of promise remain in the manufacturing sector, according to the Ulster Bank Northern Ireland purchasing managers' index.
Richard Ramsey, chief economist at Ulster Bank, said 2012 as a whole saw private sector output, new orders and employment fall at a faster rate relative to 2011.
"It is noted that the official economic growth figures for 2011, released last month, signalled a 0.2% annual contraction in Northern Ireland's overall economy. Therefore we anticipate a steeper contraction to be revealed for 2012 in due course.
"In 2013, the prospect of the Northern Ireland economy escaping recession in its technical sense is probably 50:50."
He feared the economy would continue to "bump along the bottom" during the year, neither getting significantly better or worse.
"However, a significant minority of firms are expected to grow their businesses and avail of opportunities in the year ahead," he said.
Manufacturing, seen in December as the only sector to show promise, continued to outperform the private sector, services and construction, recording an increase in staffing levels during the last month of 2012.
Overall, activity fell in December, though at a reduced rate, with the headline seasonally adjusted business activity index at 44.8, up from 41.6 in November.
Further marked reductions were seen in activity and new orders, despite companies offering discounts to clients.
Lower workloads and attempts to reduce costs led to a further decline in employment, albeit at a slower pace.
A further decrease in business activity was recorded across the Northern Ireland private sector, although the rate of contraction eased to the slowest in five months.
The decline was still marked, however, compared with stagnation in the rest of UK.
All four sectors posted falling activity, led by services in which reduced client demand was mentioned by respondents who posted a decrease in output, as well as a lack of opportunities to secure new business.
Such a scenario therefore led to another decrease in incoming new orders.
The PMI for December also noted a further fall in employment, and those surveyed also reported that attempts to reduce costs had been behind the latest fall in employment.
However, the rate of job cuts did ease for the second month running to the slowest since April 2012, with manufacturing bucking the trend, recording staff level improvements for the third time in five months.