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Northern Ireland business survey records biggest sales and output crash in 20 years

The private sector in Northern Ireland has suffered its harshest contraction on recent record - sharper than the fall felt during the global recession more than 10 years ago, a business barometer was warned.

Businesses here saw a reduction in sales and output at a rate surpassing the previous record at the height of the global financial crisis in early 2009, according to the latest purchasing managers' index (PMI) with Ulster Bank for March.

It was the harshest fall in around 20 years of the survey.

But the survey took place largely before Prime Minister Boris Johnson announced a full UK-wide lockdown.

And it has been warned that "the pace of contraction will accelerate further to fresh record lows" in April.

According to the latest survey, Northern Ireland has seen the largest retraction in business output across the UK regions.

"All 12 UK regions saw steep contractions in business activity in March. Northern Ireland posted the sharpest fall, just ahead of that seen in Scotland," the survey said.

The services sector, which includes a range of areas including hospitality, saw the worst fall - posting a figure of 23.9, where 50 means no change.

Richard Ramsey, Ulster Bank chief economist, said: "Little did I know back in January, when I was talking about the potential impact of coronavirus on the economy, the extent to which it would come to affect all of our lives.

"At that stage the concern was the indirect impact due to the lockdown in China, given China's key role as a driver of global supply chains and the world economy.

"In a short period of time, though, coronavirus went from an external threat to a very real and present internal one here in Northern Ireland, Ireland, the UK and Europe. Indeed, we are now seeing a true global pandemic and global economic lockdown."

The survey also showed the rate of job cuts was steep and the fastest for almost a decade.

"March saw a broad-based decrease in employment across all UK regions. The declines were led by deep cuts to staff numbers in Scotland, the West Midlands, Northern Ireland and London," the report said.

"At the other end of the scale, the North West, North East and East of England saw relatively moderate job losses."

Northern Ireland companies are the most pessimistic in the UK when it comes to overall business confidence.

And as well as coronavirus, Brexit was seen as a factor set to lead output to decrease over the coming year.

"Sentiment in Northern Ireland was the lowest seen across the UK, with negative predictions registered across each of the four broad sectors," it said.

Mr Ramsey said: "The April survey will be the first full month that the UK, Northern Ireland and Republic of Ireland economies will be under full lockdown conditions.

"Therefore the pace of contraction will accelerate further to fresh record lows. The local economy is enduring its fastest and deepest economic decline in a century. For a recovery to begin, the health emergency must pass."

Mr Ramsey also warned that "only when the lockdowns are lifted will economists be able to gauge the strength and timing of the economic recovery in any meaningful way".

According to the latest PMI, the "global nature of the Covid-19 pandemic meant that new export business fell sharply during March".

New business from outside the UK fell for the 14th month in a row, to its lowest level since December 2008.

Around 54% of those responding to the survey said new export orders declined over the month, with just 10% posting an expansion.

The survey also showed the sectors which have seen the biggest peaks and troughs over the last month since the start of the pandemic. Among manufacturers, food and drink producers saw the largest surge, while those involved in transport equipment saw a sizeable fall.

And among businesses within Northern Ireland's service sector, consumer services, bars, restaurants and hotels saw the largest retraction.

Belfast Telegraph