• Renewed decline in output as new orders fall again
• Inflationary pressures continue to ease
• Solid increase in employment

July data pointed to a renewed decline in business activity in Northern Ireland as demand continued to falter. Firms continued to increase their staffing levels, however. Meanwhile, a further softening of inflationary pressures was seen at the start of the third quarter. The headline seasonally adjusted Business Activity Index posted 48.2 in July, falling below the 50.0 no-change mark for the first time in six months following a reading of 52.5 in June. The decline in activity signalled by the index was modest, and linked by firms to demand weakness and the impact of inflation. The fall in output in Northern Ireland compared with a marginal increase at the UK level. Market uncertainty and price pressures resulted in a second consecutive monthly decline in new orders, with the rate of contraction accelerating from that seen in June. Meanwhile, new export orders also fell at a sharper pace. Companies continued to increase their staffing levels, although the rate of job creation eased to a six-month low. Panellists reported the filling of vacancies and efforts to expand capacity. Higher workforce numbers helped firms to be able to clear outstanding business more quickly than new orders were received, thereby leading to a sharp and accelerated reduction in backlogs of work. Inflationary pressures continued to moderate in July, with rates of increase in input costs and output prices easing to the slowest in 38 and 34 months respectively. Finally, hopes for a recovery in demand over the coming year supported optimism in the 12-month outlook for business activity. In fact, sentiment was at a threemonth high.

Please see the report in full:

Ulster Bank Northern Ireland PMI (PDF, 3,636KB)