Belfast Telegraph

Northern Ireland behind regional rivals despite growth in all sectors of economy

By Rachel Martin

Manufacturing orders fell more sharply among Northern Ireland firms last month than for their counterparts in the UK and Republic, according to a major survey released today.

The Ulster Bank Purchasing Manager's Index for the month of September showed that manufacturing orders had fallen for the first time in nine months in Northern Ireland.

However, increased workloads across all sectors encouraged firms to take on extra staff for the eighth month in a row.

But that jobs increase was weaker than that seen across the UK economy as a whole.

The September survey showed that the seasonally adjusted Business Activity Index rose slightly in September, signalling a fifth consecutive monthly increase in output across the Northern Ireland private sector.

All four sectors recorded growth of output, led by retail and construction, where firms posted their first increase in activity since February. The services and manufacturing sectors also boosted activity.

The rate of cost inflation among Northern Ireland companies also slowed in September. While higher staff costs contributed to increased input prices, a number of respondents mentioned significant reductions in the prices of commodities such as fuel and steel.

Across the private sector as a whole, output prices fell solidly, with the rate of decline the sharpest in seven months.

And Ulster Bank chief economist Richard Ramsey warned that firms would face a further obstacle in the form of intense public expenditure challenges. He said: "Overall, the latest survey is littered with positive headlines. But equally, there are also reasons for concern - not least the global economic slowdown, which appears to be gathering momentum.

"It is noted that global manufacturing output growth slowed to a 29-month low in September.

"The most encouraging aspects of the latest Northern Ireland survey in September were the pick-up in the rate of growth in business activity and new export orders. However, the pace of growth of new orders [domestic and exports] slipped for the third month in a row, and remains below the pre-downturn average.

"The pace of employment growth also slipped in September, with Northern Ireland firms experiencing one of the weakest rates of employment growth of any UK region."

But he added: "The construction sector has seen a return to growth in output and orders in September. However, it continues to lag, and was the only sector to report a contraction in activity, orders and employment over the third quarter.

"The manufacturing sector is experiencing a notable slowdown, with activity, orders and employment all weaker in the third quarter relative to the previous quarter."

But Mr Ramsey also said September was the first month in over a year in which all sectors experienced growth.

Two companies feeling the pressure are aircraft manufacturer Bombardier, following the difficulties surrounding its CSeries single-aisle jet, as well as generator maker Caterpillar NI, which has faced speculation that one of its sites in Northern Ireland may be sold.

Belfast Telegraph