More jobs fears amid private sector slump in Northern Ireland
Northern Ireland has suffered a sharp decline in business activity sparking fears of further job losses, it emerged today.
Research released by the Ulster Bank showed a slump in the private sector, with October activity figures recording the sharpest drop in three months.
The decline continues a downward trend which has now lasted for 35 months, and comes despite growth in the overall UK economy.
Chief economist for the Ulster Bank in Northern Ireland Richard Ramsey said the data pointed to the prospect of further unemployment.
"Whilst the October survey saw the UK post its strongest rate of growth in three months, Northern Ireland's private sector firms reported their sharpest rate of decline over the same period," he said.
"This highlights that the two economies continue to move in opposite directions.
"To date, there has been only one month during the last 35 months when Northern Ireland firms have not posted a fall in business output."
Pointing to other pressures on the local economy, he added: "Given this context, the trend in job losses, which has now been a feature since March 2008, is set to continue for some time yet."
The Ulster Bank said the headline seasonally adjusted Business Activity Index posted 44.1 in October, down from 45.3 in the previous month.
Mr Ramsey said the figures measuring business activity reflected difficulties being faced by a broad section of the economy, with local manufacturing the only area continuing to report growth.
The main findings of the October survey were:
- New business fell sharply in October, and at the second-fastest rate since April 2009.
- Employee numbers fell in October, in line with the trend observed since March 2008. Anecdotal evidence suggested that job losses reflected falling new business.
- Anecdotal evidence suggested some firms were unable to pass on higher costs to customers amid strong competition for new work.
"Northern Ireland's construction firms recorded their sharpest rate of decline since March last year. This contrasts with continued expansion in the UK's construction industry," he said.
"The forward looking new orders index provides a further indication of the challenges that lie ahead. UK firms saw the pace of new orders growth accelerate last month.
"Conversely, local firms saw the rate of decline in incoming business accelerate. Indeed, Northern Ireland firms have witnessed the fastest rate of decline in new orders of all the UK regions in each of the last 20 months."
He said all sectors recorded a decline in new orders in October with retail, services and construction reporting the most severe declines.
And the economist said the impact of central Government spending cuts on the Stormont purse would also have a major impact.
"The weakness in the construction sector remains the primary concern bearing in mind the Executive's capital investment plans are to be slashed by almost 60% over the next four years relative to last year's record levels," said the economist.
"Looking specifically at exports, it is noted that new export orders have fallen for the 33rd consecutive month.
"While some 18% of firms saw a rise in new export orders in October more than twice this number experienced a fall in export orders.
"Given this context, the trend in job losses, which has now been a feature since March 2008, is set to continue for some time yet."