Belfast Telegraph

Our private sector still mired in gloom, says bank study

Number of months the level of new business won by firms declined

Activity in Northern Ireland's private sector economy fell at the sharpest rate in sixth months in February, said Ulster Bank.

Its Northern Ireland PMI index, produced by Markit, revealed a steep decline in new orders, a reduction in employment, a sharp rise in input costs and a fall in the prices charged for goods and services by companies here.

The firms surveyed said there had been weak underlying demand during February and the dip in employment was blamed on a lack of incoming orders.

They also reported high energy and raw material costs while most were having to cut selling prices in order to retain existing customers and attract new business.

Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said the building industry continues to struggle.

"Those firms within the construction sector continue to report the fastest rate of contraction in new orders by quite some margin," he said.

But the rest of the Northern Ireland economy isn't immune.

"Falling demand and rising inflation remains the key theme across the survey. Against this challenging background, all sectors of the economy are in cost cutting mode and firms continue to report falling employment levels.

"The level of new business placed with Northern Ireland firms fell at its fastest rate in six months in February and extended the current period of decline to 51 months."

Manufacturing companies also shows a marked slide in activity.

"Firms within the manufacturing sector signalled the sharpest rate of decline in output and new orders in 13 months during February. However, it is important to remember that these declines are coming off extremely strong rates of growth in the fourth quarter of last year.

"Therefore a true indication of the manufacturing sector's underlying performance will only become clear in the next few surveys."

The overall decline in the Northern Ireland economy contrasted with growth across the UK as a whole.