17 August 2015

Northern Ireland experiences strong output growth during July

The latest Northern Ireland PMI report – produced for Ulster Bank by Markit – pointed to further solid growth of the Northern Ireland private sector, with output and new orders each rising for the third month running. This contributed to increases in both backlogs of work and employment. Meanwhile, cost inflation picked up to the fastest so far this year.

Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:

"The current sequence of output growth in Northern Ireland’s private sector was extended to three months in July. The latest increase was again solid, albeit unspectacular relative to the expansion seen in parts of 2013 and 2014. However, the current growth rates are more in line with those prior to the financial crisis, and are therefore potentially more sustainable.

"Alongside growth of activity was another solid increase in new business which again led to a rise in backlogs of work. In fact, outstanding work either not completed or not yet started increased back-to-back for the first time since Q3 last year. As part of efforts to alleviate this, staffing levels were raised again, albeit at only a modest pace.

"Delving into the latest sector data, we see a welcome return to growth in activity at retailers in July, following a sustained period of contraction, joining the manufacturing and service sectors in expansion mode. However, the local construction sector continues to struggle, seeing a further drop in activity and new orders.

"The relative strength of sterling against the euro has made sales to euro area countries difficult for local firms in recent months, but companies were able to overcome this to some extent in July, posting marginal growth in new export orders. This likely reflects the continued strong performance of key trading partner the Republic of Ireland. This factor, alongside a generally improving UK economy, should provide opportunities for growth at Northern Ireland firms in the coming months."