Optimism for Northern Ireland as signs show slump drawing to close
Increased activity in manufacturing and construction sectors
NORTHERN Ireland's six-year economic slump could be drawing to a close as a bellwether survey showed the first increase in construction and manufacturing orders since 2007.
According to the Ulster Bank purchase managers' index for June, new business increased, with companies saying that clients were growing in confidence and placing new orders.
But the index also showed that staff numbers in Northern Ireland firms fell in June – despite increased activity for retailers, as well as manufacturing and construction firms.
However, new export orders continued to fall, albeit at a much slower pace than seen in the previous month.
Ulster Bank chief economist Richard Ramsey said the Northern Ireland economy appeared to be enjoying a "rebound" in activity.
"Manufacturing production, construction output and retail sales all returned to growth in June, highlighting a broad-based improvement in business conditions in the month," he said.
"Firms waved goodbye to a five-and-a-half year period of falling new orders in June, as stronger demand in the manufacturing and construction sectors saw overall levels of new work increase for the first time since late 2007.
"Demand levels in key export markets appeared less of a drag on new business flows in June, which helped the manufacturing sector achieve its strongest gains in order volumes since February.
"Meanwhile, there was a positive change of direction in new work for the domestic-focused construction sector, perhaps helped by signs of stabilisation in the property market."
He said the likelihood of growth in the economy had "surely" been boosted by the survey results.
"Rising levels of new work and an accumulation of backlogs in June should translate into upward pressure on production schedules during the second half of 2013.
Despite the signs of growth, jobs were falling at a faster rate than seen in May, with respondents saying they were not replacing departing staff.
June also showed a further sharp increase in input prices at companies, with panellists citing higher utility costs.
The rate of inflation was also much faster than the average for the UK as a whole and the increases in input prices were seen across all four monitored sectors.
Prices charged were unchanged at Northern Ireland private sector firms during June, following a slight increase in May.
Average prices charged rose at retailers and manufacturers, but fell at services and construction companies.