Momentum In Northern Ireland Economy Begins To Slow

Recent reports show that, although the economy here in Northern Ireland continues to grow, the pace of that growth has now slowed. The Purchasing Managers Index (PMI) report produced by the Ulster Bank found that although output has increased in the manufacturing and services sectors, there has been a fall in the retail and construction sectors.

Business Activity Grew At A Slower Rate In August

Richard Ramsey, Chief Economist of Ulster Bank in Northern Ireland, is quoted on the Today UK News website as saying:

“Most of the UK regions saw business activity grow at a slower rate in August, and Northern Ireland was no exception,

“Last month marked local firms’ slowest rates of growth in output, orders and employment in five months. But a two-speed recovery was on show in August at a sector level.

“Manufacturing and services firms saw some loss of momentum in August but still chalked up reasonable rates of growth in output and orders while staffing levels continued to rise at a solid pace. But retailers joined construction in contraction territory, with falling sales and orders. Hiring within retail though continued last month.”

“Elsewhere, the survey revealed again an all-too familiar story, with inflationary pressures and lengthening supplier delivery times. Within the UK, Northern Ireland continues to report the steepest rises in input costs, with local firms raising the prices of their goods and services at faster rates than any other region.

“Price pressures linked to raw materials, fuel, freight, wages and Brexit continued to be cited by survey respondents. Inflationary price pressures in August eased only marginally relative to their recent record highs, although services firms raised their prices at the fastest pace in 13 years.

Firms Will Continue To Grapple With Inflationary Challenges Etc

And on the challenges ahead Mr Ramsey said: “In the meantime, firms will continue to grapple with inflationary challenges, supply chain disruption, skills shortages and adapting to Brexit. But as we saw last week, increased taxation in 2022 will further add to businesses’ mounting cost burden.”

There are certainly huge ongoing challenges that businesses up and down the country will have to negotiate, but we have to face the future with firm optimism that better times are ahead as we move out of the pandemic with the help of the successful vaccine programme. It is good to see that unemployment is reducing as firms take on more staff due to an increase in demand for their products and services. Let us hope that this trend continues in future months.