Belfast Telegraph

Political uncertainty hampering Northern Ireland business growth

Richard Ramsey, chief economist at Ulster Bank
Richard Ramsey, chief economist at Ulster Bank

By Emma Deighan

Northern Ireland companies experienced their lowest rise in activity in eight months during March according to a report today.

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The Ulster Bank Purchasing Managers' Index for March 2018 showed weaker rises in both output and new orders while input costs and output prices rose sharply, albeit at a slower rate than in Feburary.

There was some good news in the report as growth was sustained amid a stronger rise in exports and a higher rate of job creation.

It's thought that political uncertainty here has contributed to decreased hope in the sector, with some citing it could hamper growth.

Firms remained optimistic about the year ahead - but optimism was the weakest in the UK for the third month in a row.

Richard Ramsey, chief economist at Ulster Bank, said all regions in the UK experienced a slowdown with the adverse weather cited as a possible factor. "Almost all regions of the UK experienced a slowdown last month, driven at least in part by the weather conditions, with Northern Ireland output and new orders easing to eight-month and 17-month lows respectively, with the services sector the worst hit," he said.

"However, the one-off weather factor makes it difficult to ascertain to what extent this is a blip that will be reversed in April or something more fundamental."

He said job creation and exports sped up, with the latter helped by the buoyant economy in the Republic - one of the fastest growing in Europe.

"Inflationary pressures also eased outside of retail but remain elevated, with high staff costs and sterling weakness as factors.

"Respondents also cited the higher cost of steel as a component in the inflationary pressures, in part due to high global demand."

He added: "With steel and other raw materials being a target for tariffs, this trend could well continue and economies around the world will not want to see an escalation in the opening shots of a trade war."

Belfast Telegraph