Belfast Telegraph

Thursday 27 November 2014

Business activity decline continues

Ulster Bank chief economist Richard Ramsey said July saw the fastest rate of decline in Northern Ireland's service sector
Ulster Bank chief economist Richard Ramsey said July saw the fastest rate of decline in Northern Ireland's service sector

Business activity in Northern Ireland's private sector declined for the 20th month running during July, a survey said.

The latest decrease was the sharpest since January and contrasted with growth recorded across the UK economy as a whole, the Purchasing Managers' Index (PMI) said.

This was blamed on lower levels of new work, with activity falling fastest in construction followed by the service industry.

There was only a modest drop in workforce numbers in July, representing the weakest rate of decline since April 2008.

Ulster Bank chief economist Richard Ramsey said: "Last month Northern Ireland's service sector posted its fastest rate of decline in business output since April 2009. This is concerning given that the cuts in public expenditure have yet to bite.

"Furthermore, an increasing number of retailers reported falling levels of business in July, with pricing power now at its weakest in 12 months."

Around 46% of businesses recorded a fall in export orders in July, amid economic instability across Europe and the US, he said.

The expert said the PMI survey showed that private business activity in Northern Ireland reduced for the 20th month running.

Mr Ramsey added: "Looking at the relevant indices for business activity, new orders and exports, a recovery remains some way off. Whilst the Northern Ireland and UK employment indices converged in July, the same cannot be said for business activity and new orders where the divergence in economic performance continues.

"The UK's private sector saw an acceleration in the growth rates of both these measures. Conversely, Northern Ireland's firms witnessed an acceleration in the rate of contraction in the level of output and new business."

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