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Local business pessimistic despite private sector picking up in growth


Richard Ramsey

Richard Ramsey

Richard Ramsey

Businesses in Northern Ireland are gloomy about the future as the construction sector in particular pays the price of a lack of Executive, according to a survey today.

And Ulster Bank chief economist Richard Ramsey said business and politics were intertwined, with the outcome of Brexit negotiations the number one factor on business minds.

He spoke as the Ulster Bank purchasing managers' index said Northern Ireland was the only UK region to see a pick-up in growth during October.

But the rate of expansion was weaker than earlier this year, and exports had weakened.

And while activity and job creation had picked up, business sentiment was at its weakest for more than a year and a half.

Mr Ramsey said: "Northern Ireland was the only region of the UK to see private sector growth pick up in October. However, this sounds much better than it actually is.

"The pace of expansion remained subdued, and two of the four sectors surveyed - retail and construction - actually saw a contraction last month."

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Construction was now bearing the brunt of a lack of Stormont Executive as crucial decisions on big-money projects - which could generate millions of pounds of work for firms - were not being made.

Mr Ramsey said: "The lack of decision-making in government in Northern Ireland and the resulting logjam in capital projects is now being acutely felt by many construction businesses."

"However, other sectors were still positive. The manufacturing sector continues to experience strong demand, despite a slowdown in export orders."

That had left manufacturing as the most optimistic of sectors.

"But clearly, the big factor that will determine whether this optimism is realised is how Brexit pans out," Mr Ramsey said. "The outcome of the negotiations will determine the trajectory of private sector growth here into the foreseeable future, particularly in the export-focused manufacturing sector.

"Today, forecasting growth means forecasting politics."

The PMI said that growth of activity in the Republic, Northern Ireland's main export market, had eased to a seven-month low in October.

The rate of expansion had also eased in Canada, while there was weakness in some eurozone economies.