Northern Ireland private sector records the UK's fastest rate of growth during July
Northern Ireland's private sector recorded the fastest rate of growth of all the UK regions for both output and new orders during July, according to the latest Purchasing Managers' Index from Ulster Bank.
It's the fourth month in a row that the pace of activity picked up. However, the survey showed only a slight increase in employment last month, with business confidence easing.
The bank's chief economist, Richard Ramsey, said the private sector here started the third quarter where it had left off in June, adding that Northern Ireland's marked improvement last month contrasted with a notable slowdown in a number of English regions, which dragged the overall UK growth rate lower.
The survey found that the pick-up in business activity during July was broad-based, with all sectors bar manufacturing reporting faster rates of output growth.
Construction activity accelerated to a 46-month high with the upswing mirroring a marked improvement within the UK's construction industry.
Ulster Bank said that the good weather was again being cited as a factor supporting demand across a range of sectors.
However manufacturing activity saw new orders slowing to a 21-month low. Mr Ramsey said while local firms have been increasing their headcount for the last three-and-a-half years, the pace of job creation had eased to a 12-month low in July, with reduced hiring within manufacturing and services. A number of firms also reported difficulties in recruiting suitable staff.
"Inflationary pressures also remain a key cause of concern amongst businesses," said Mr Ramsey.
"The north east knocked Northern Ireland off the UK top spot for input cost inflation in July. Northern Ireland firms though raised their prices at the fastest rate of all the UK regions and at their sharpest rate in a decade."
With sterling depreciating further since the survey was conducted, Mr Ramsey said the economy can expect inflationary pressures to continue to feature prominently as an issue in the coming months.
"Overall, current business conditions are very encouraging," he said. "The key question, however, is will it last?
"Significantly, Northern Ireland firms are the least optimistic about business activity for the year ahead of all the UK regions.
"The slide in local business confidence conceals contrasting performance within sectors.
"Services firms remain the most upbeat and resilient. But confidence within construction, retail and manufacturing firms hasn't been lower in the last 17 months."