NI firms see sharp decline in activity
Business activity in Northern Ireland fell sharply last month - though there were some rays of hope amid the economic gloom, according to a report.
While less business was being done, the Ulster Bank's Purchasing Managers' Index (PMI) report for July shows that cost pressures eased and job losses have slowed.
The monthly private sector survey indicates that input cost inflation eased last month to its lowest rate in 2011 so far.
Although strong, the inflation rate slowed for the third month running.
Any cost increases reported were linked to higher raw material, energy and fuel prices, with construction being the industry hit hardest.
The report states companies reduced staff numbers "at only a marginal rate", representing the slowest decline since April 2008.
Employee levels fell in both the construction and retail sectors, but rose slightly in manufacturing and services.
Overall, business activity in Northern Ireland fell sharply, in contrast to output growth recorded for the UK as a whole.
A drop in new business was cited as one of the main factors, due to fragile demand conditions.
According to Ulster Bank's chief economist Richard Ramsey, a recovery "remains some way off".
He said: "While 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.
"Firms witnessed an acceleration in the rate of contraction in the level of output and new business. A hefty 46% of firms reported a fall in export orders in July."
Mr Ramsey acknowledged the achievements of the manufacturing industry, with output falling only marginally.
However, he expressed concern that Northern Ireland's performance in services had diverged so dramatically from the UK's overall results.
"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."
of firms reported a fall in export orders in July