Northern Ireland’s private sector grew at its slowest rate in 23 months in September with the mood among business the lowest in the UK, according to a survey today.
Ulster Bank’s latest purchasing managers index (PMI) showed a further loss in growth momentum across the private sector. Business activity, new orders and employment all rose at weaker rates. Sentiment among businesses also hit a 19 month low.
Ulster Bank chief economist Richard Ramsey said Northern Ireland went from having the fastest growing private sector in the UK in July to being ranked second from bottom in September.
“This slowdown isn’t entirely unexpected, given that July received a significant weather-related boost, and taking the quarter as a whole, the deceleration looks more modest,” he said.
“However, the July-September period still marks the slowest quarterly rate of private sector growth that NI has seen in five quarters. In addition, NI’s poorer performance at the end of the quarter relative to the rest of the UK can’t be explained solely by the weather, given that July’s sunshine was a UK-wide phenomenon.”
The new PMI survey showed NI firms are now the least optimistic in the UK, and at their most pessimistic since Ulster Bank began measuring sentiment as an indicator 19-months ago. Mr Ramsey said Brexit remains a major concern for respondents.
“Notably, the construction sector, which had been experiencing something of a relative purple patch, is seeing expectations fall. Firms in this sector now expect their workloads to be lower in 12 months’ time than they are currently, with major public sector infrastructure projects being put on hold,” he said.
“Concerningly, all sectors experienced a slowdown in September in terms of activity, orders and job creation. However, all sectors are still in growth mode, for now at least, and manufacturing is still outperforming relative to its long-term average. Inflationary pressures have also shown signs of easing. However, what does or doesn’t happen regarding Brexit will exercise NI businesses in the quarters ahead and looks set to continue to impact on both confidence and activity.”
The seasonally adjusted business activity index dropped to 52.1. Although still up over the month, it was down from 53.9 in August and the weakest rate of expansion since October 2016.