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Survey: UK sales rising as exports start to slide

Northern Ireland firms saw UK business improve in the second quarter but many companies are still struggling with sales to other key markets, a survey revealed today.

The local figures from the British Chambers of Commerce Economic Survey showed a 5% increase in the number of local firms reporting increased UK sales (24%) and a 6% increase in the number registering increased UK orders (23%) compared with the previous three months.

However the number of firms reporting increased export sales during the same period declined from 13% of those surveyed in the first quarter to 11% in the second.

And the number of firms reporting an increase in export orders slipped from 14% in the first quarter to 12% in the second.

BCC said that a "significant level of growth and optimism" emerged from the manufacturing sector but ongoing difficulties in the service sector resulted in only one fifth of companies surveyed in this sector reporting operations at full capacity.

President of the Northern Ireland Chamber of Commerce Francis Martin said of the survey: "While the better business environment is undeniably good news, the strong improvements in the manufacturing sector need to be nurtured. Some factors point towards difficulties for firms going forward, with the cost of raw materials placing upward pressure on prices, and currency fluctuations becoming an increasing worry.

"The small decline in export sales and export orders shows that challenges remain in efforts to ensure that Northern Ireland industry builds and sustains a strong export base."

Chamber chief executive Ann McGregor added: "While today's survey, both here and across the UK, show a broadly improved performance, the service sector is still weak, with just over a fifth of respondents operating at full capacity. Of most concern is how this weakness could impact on the labour market, with problems compounded by a large incidence of recruitment difficulties for those who did try to find staff."

Key indicators in the UK-wide survey - which interviewed 5,600 businesses - including employment expectations, investment plans, export orders and domestic sales all made gains in quarter.

Major highlights included a 30% jump in domestic manufacturing sales and a 12% rise in the service sector's home sales.

Manufacturing export sales were up 31%, the highest level since mid 2006.