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Activity in the private sector still flatlining

Northern Ireland's beleaguered private sector is the only region in the UK with falling output and employment levels, it has emerged today.

Although the pace of decline in business activity is stabilising, according to the latest Ulster Bank PMI, the rate of job losses accelerated last month.

One of the province's worst impacted sectors was the service industry where activity (excluding retail) decreased at a faster rate in April. In a double blow, Northern Ireland services firms reduced their employment numbers at the sharpest rate in seven months.

Ulster Bank chief economist Richard Ramsey said: "Clearly the volcanic ash cloud had a negative impact on service sector activity throughout the UK. However, the UK still managed buoyant growth rates."

The retail sector recorded the sharpest fall in terms of employment and activity of all the Northern Ireland sectors. Mr Ramsey explained: "Clearly the fall in both Republic of Ireland prices and the euro/sterling exchange rate have stemmed the flow of cross-border shoppers."

However, there was a glimmer of hope for the struggling manufacturing sector which last month had its strongest rise in manufacturing orders since April 2007. It was also its third monthly increase. But Mr Ramsey cautioned that "the pick up in global demand has also triggered a rise in input costs, with manufacturing more exposed to these inflationary pressures than elsewhere".

The main findings of the April survey revealed:

  • The level of new business taken by Northern Ireland private sector firms fell again in April, decreasing at a rate faster than in the previous month.
  • Reduced employment reflected fewer new business gains and general cost-cutting efforts.

Mr Ramsey added: "The latest report pointed to a slower reduction in Northern Ireland private sector activity during April, with the seasonally adjusted Business Activity Index rising from 47.1 to 47.5. Activity levels have now fallen for five successive months and the downturn remained broad-based across all four sectors monitored by the survey."