Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:
“March marked the end of the first quarter of 2016 with Northern Ireland’s private sector continuing to report a very strong start to the year. Indeed, last month firms saw the rate of growth in business activity and new orders accelerate to an eighteen–month high, with export orders expanding at their fastest rate in 20 months. The marked depreciation in sterling over the last four months, linked to uncertainty with the outcome from the forthcoming EU Referendum, has provided a significant and unexpected tailwind for local exporters and retailers sensitive to cross–border footfall. Given Northern Ireland’s reliance on the Republic of Ireland economy, the combination of strong growth in the Irish Republic coupled with a competitive sterling / euro exchange rate have presented many firms with very favourable conditions. It is noted that local firms also increased their staffing levels in March for the 14th month in a row.
“The latest Ulster Bank PMI survey also confirms that Northern Ireland’s private sector outperformed the UK in terms of output and employment growth in March, and for Q1 as a whole. Indeed, Northern Ireland’s private sector reported the fastest rate of growth in business activity of all the UK regions in March. It is worth remembering that the local economy is playing catch–up with its UK counterparts following a sustained period of underperformance.
“The encouraging headline performance conceals contrasting fortunes at a sector level. It should be noted that the agricultural industry is experiencing the most challenging conditions of all sectors but it is not covered within any of the PMI surveys. The services and retail sectors remain the star performers. Both these sectors reported an acceleration in output, orders and employment growth in March. New orders growth is strongest amongst services firms, with incoming business rising at its fastest rate in 22 months. Meanwhile retail continues to report the fastest rates of employment growth of all the sectors. However, competition amongst retailers remains fierce, with prices being reduced at their fastest rate since March 2009.
“Outside of services and retail, construction firms remain in expansion mode. However, the rate of growth in output, orders and employment has eased. Meanwhile local manufacturing continues to struggle. Output was flat in March, although there was a modest pick–up in manufacturing orders. However, manufacturing continues to report job losses, the only sector to do so, with March representing the seventh successive month of employment declines.”
Source: Richard Ramsey, Ulster Bank Chief Economist, Northern Ireland, RBS Economics
