Belfast Telegraph

Ulster 'is still being hit harder' than other parts of UK

By Margaret Canning

Private sector activity in Northern Ireland continued to fall last month, despite healthier signs in the UK as a whole, an Ulster Bank survey has said.

The purchasing managers' index report (PMI) said new orders kept falling in most firms during April - though the rate of decline had slowed down on a month earlier, reflected in a rise in the business activity index from 40.1 to 45.4.

Ulster Bank chief economist Richard Ramsey said the monthly report by Markit told a familiar story, and one which marked Northern Ireland out from the rest of the UK.

"The UK regional PMIs continue to report that Northern Ireland is being hit much harder than other UK regions in terms of private sector output and employment."

He said that while manufacturing, services and construction had contracted more gently in April, retailers reported their sharpest fall in activity since March 2010.

But it wasn't all bad news with both employment and inflationary pressures betraying signs of hope.

"On a positive note, the pace of job losses was relatively modest with the manufacturing sector reporting almost no change in its April employment levels.

"The most encouraging sign, however, concerns the easing of inflationary pressures. The inflation index fell to its lowest level in 17 months in April. A further easing is anticipated in the coming months given the strengthening of sterling and the fall in oil prices since the April survey," it said.

"Whilst a stronger pound may take the edge off the price competitiveness of some exporters, those firms importing raw materials should benefit from lower costs."

Further afield and PMIs in the eurozone were giving rise to concern with output in the eurozone PMI showing its steepest fall since November.

"Significantly, Italy and France came in much weaker than expected and posted their fastest rates of decline since mid-2009.

"Even the economic powerhouse that is Germany saw its composite PMI dip below the 50 threshold that denotes contraction," the PMI report notes.