Business survey shows further fall
Published 11/07/2011 | 01:12
Business activity in the Northern Ireland private sector fell at its fastest rate for five months in June, a companies survey revealed.
Declining output and employment levels were evident across retailers, services and the construction industry.
Ulster Bank chief economist Richard Ramsey said: "Most economies experienced a weaker second quarter relative to the first and Northern Ireland has proved to be no exception. However, given that an economic recovery has not yet been established in Northern Ireland, this has involved a pick-up in the rate of decline in business output."
Last month saw a modest acceleration in private sector output growth in the UK, while business activity within the Republic of Ireland remained broadly flat.
Northern Ireland firms, however, reported a pick-up in the pace of decline in both output and employment levels in June. This was evident across the services, retail and construction sectors. Manufacturing remains the best-performing sector, the Ulster Bank Purchasing Managers' Indexes survey said.
Mr Ramsey added: "Overall, employment within the local private sector fell at its fastest rate in seven months. This was largely due to the steep rise in job losses within the service sector.
"The most positive sign in the latest survey was the substantial easing in the rate of decline in new orders (although almost one in three firms still posted a reduction in new business last month). This was due to a significant improvement within the services industry."
Meanwhile, the number of new orders for retailers last month hit its lowest level in two years.
Mr Ramsey said: "Whilst inflationary pressures remain a key challenge for Northern Ireland industry, the rate of input cost inflation has eased in each of the last two months. At a regional level, however, local firms continue to report greater inflationary pressures than other UK regions.
"Furthermore, due to poor demand and strong competitive pressures, pricing power amongst local firms remains particularly weak. As a result, the squeeze on profitability appears to be more marked amongst local firms than in other parts of the UK."