Businesses confident despite rate of growth slowing down during August
Businesses in Northern Ireland felt more confident and created more jobs during August even though the rate of growth slowed down for many, according to a survey today.
The Ulster Bank purchasing managers' index (PMI) survey said growth in output and new orders reached a four-month low in August, with political and economic uncertainty taking its toll.
But manufacturing enjoyed growth almost across the board, particularly in new orders.
However, the retail, construction and services sectors - covering everything from estate agents to restaurants - all experienced a slowdown in growth.
And output growth in Northern Ireland firms was the weakest in the UK.
But despite the signs of slowdown, the rate of job creation was up even though companies were still facing increased costs, with inflation worse here than the other UK regions.
Higher fuel and staff costs, as well as sterling weakness, all contributed to inflation.
The headline business activity rate was down from 56.6 in July to 53.9 in August.
Ulster Bank chief economist Richard Ramsey said the weather had played a significant role in 2018 so far, from the effects of harsh winter weather to the summer heatwave.
"We've perhaps never seen a year when the weather has played such a big role in the Northern Ireland economy. In the early part of 2018, the Beast from the East disrupted business activity, therefore impacting on output.
"More recently, the incredibly good weather has been cited as a major factor behind faster rates of growth in the private sector during June and July. Perhaps unsurprisingly, given the milder weather, August saw something of a slowdown."
Not only was growth in output and new orders down during August, but export orders grew at the weakest rate for 10 months - though the month did nonetheless mark more than two years of growth for exports. And while growth had weakened in shops, on building sites and in the services sector, manufacturing enjoyed growth in every indicator.
"On the other hand, manufacturing saw almost every indicator improve. In particular, the notable growth in new orders bodes well for the months ahead," said Mr Ramsey.
And he said it remained to be seen whether the slowdown was related to a comedown from the good weather.
"It will become clearer if the latest slowdown is simply related to an easing back from June and July's weather-related high, or if this is evidence of an underlying weakness emerging.
"The fact that construction firms expect activity to fall over the next 12 months, suggests that they think it may be the latter."