Business Activity Accelerates In Private Sector

The latest figures from the Ulster Bank purchasing manager’s index has revealed that business activity grew last month (February 2024), with the manufacturing and services sectors showing a particular uplift in new orders. However the construction and retail sectors did not fare so well as they showed a small decrease in activity. Looking further into the data it reveals that the uplift in business activity was mainly driven by the domestic market, as export sales decreased last month.

Business Activity And New Orders Both Expanded

Here is what Richard Ramsey, the chief economist in Northern Ireland for the Ulster Bank, said about this latest report, which we have copied from an article in the Belfast Telegraph. He said that:

“Northern Ireland’s private sector continued to benefit from increased demand in February. Business activity and new orders both expanded last month at their fastest pace in eleven months, 

“However, the continued decline in export orders – 10 consecutive months of contraction – indicates that the pick-up in demand is largely domestically driven.”

Small Increase To Staffing Levels

There was a small increase to staffing levels in the private sector and Richard is quoted as saying that:

“Resource constraints and recruitment difficulties were cited as factors limiting employment growth,

“Services firms posted the steepest rise in business activity in February and alongside manufacturing, recorded its fastest rate of expansion in activity in 22 months. Meanwhile retail sales were broadly flat, with construction activity declining modestly in February. Construction was the only one of the four sectors not to experience a pick-up in new orders last month, extending its run of falling demand to 32 months.

“Inflationary pressures and supply chain disruption made an unwelcome return in February’s survey. Rising wages and higher shipping costs resulting from the Red Sea crisis helped propel input cost inflation to a nine-month high.

“This was most notable amongst manufacturers. Manufacturers and retailers reported a marked lengthening in supplier delivery times. Encouragingly, this is not the case within construction. Indeed, construction firms continued to report a shortening in their supplier delivery times and input costs within the building industry eased to their lowest rate in forty-four months”

Finally he went on to say that the return of politicians to Stormont is helping to create more positive sentiment:

“Some survey respondents said that an unblocking of previously delayed work is helping to build a pipeline of new activity. Sentiment was particularly strong amongst manufacturers, with optimism about future output at a record high. Even the beleaguered construction industry is now relatively optimistic about output in 12 months’ time.”

All relatively good news. So with Stormont finally functioning once more and business activity increasing, if this can be replicated over the next few months there could be a real sense of optimism building across Northern Ireland.