The Recession is hitting Northern Ireland harder than the UK’s other regions, according to a worrying new report released today.
The latest Ulster Bank Northern Ireland Purchasing Managers’ Index (PMI) report signalled that business activity fell sharply in February.
Falling to 42.4 from 43.9 in January, the report’s activity index pointed to the fastest rate of decline for 10 months. A rating of below 50 indicates a decline in activity.
All the other UK regions have seen a rise in private sector activity since July, with new orders rising for five months in a row.
Ulster Bank economist Richard Ramsey said: “Given the renewed weakness in the Northern Ireland economy highlighted in recent PMIs, viewed alongside the official output and labour market statistics, it is difficult to reach any conclusion other than the recession continues to hit Northern Ireland harder than anywhere else in the UK.
“In light of the forthcoming public expenditure cuts this trend is set to continue for some time yet,” he said.
“It is now clear that the Northern Ireland economy has not experienced the early 2010 recovery that we had been anticipating. This is concerning given that the region’s economy is in such a fragile state before the public sector recession has yet to occur.
“Looking at the private sector as a whole, Northern Ireland continues to experience the most severe squeeze on profit margins of all the UK regions.”
Ulster Bank said the recent bout of economic weakness has been driven by the services and retail sectors, both of which will be affected by upcoming public expenditure cuts.
Prospects are brighter for the manufacturing sector which recorded a rise in new orders in February.
The latest survey showed the level of new business fell for the 27th consecutive month while staff levels in the private sector fell again — extending the current period of decline to two years. Firms indicated that their costs had risen at the fastest rate since October 2008 at the same time as they were lowering prices to stimulate demand.
The pace of decline here has also been steeper than in the Republic this year, the PMI said.