Key findings
- Fall in staffing levels after prolonged period of job creation
- Output down for third month running, but outlook brightens
- Selling prices rise at fastest pace in almost two years
The latest Ulster Bank Regional Growth Tracker signalled ongoing reductions in business activity in Northern Ireland. More positively, business confidence towards the outlook improved. Meanwhile, firms scaled back their workforce numbers for the first time in four years, in part due to efforts to limit overheads. Rates of input cost and output price inflation quickened over the month. The headline Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s private sector – posted 44.9 in February, a touch lower than the reading of 45.0 in January and below the 50.0 no-change mark for the third month running. Respondents linked lower output to falling new orders amid a subdued demand environment. There were also some mentions of particular construction sector weakness. Three of the four categories covered by the report saw activity decrease in February. The sharpest contractions were in construction and retail, while services activity fell for the first time in 16 months. On the other hand, manufacturing production continued to expand
Sebastian Burnside, Chief Economist for Ulster Bank, said:
“A first reduction in employment in four years added to the sense that the Northern Ireland private sector is going through a challenging period at present. Firms acted to lower staffing levels amid further declines in output and new orders, but also to try and limit overheads before the impending increase in employer National Insurance Contributions. In fact, both input costs and output prices rose at the sharpest rates in almost two years, with costs up more quickly in Northern Ireland than anywhere else in the UK. “By sector, the overall downturn continued to be driven by the construction and retail categories, but there were signs of emerging weakness in services as well. “On a more positive note, business confidence regained some ground in February, with manufacturers particularly bullish in the outlook.”)
Please see the regional report in full:
Ulster Bank Northern Ireland Growth Tracker (PDF, 1.1MB)
