Staff Levels Remaining Strong But Private Sector Business Fell At End Of 2024

As we wrote about in our previous blog, the medium to long term outlook for business growth in Northern Ireland looks very healthy, and it is expected we need to be proactive in ensuring there is going to be a big enough labour force to ensure job vacancies are covered.

But looking at the recent past it does appear that private sector business activity fell away somewhat at the end of last year, with the construction and retail sectors having a particular downturn. The services and manufacturing sectors fared better, even so the pace of output in services declined. Northern Ireland, as reported by stats from the Ulster Bank purchasing managers index, was one of the weakest of the 12 regions of the UK in terms of business performance.

On A More Positive Note Staff Levels Continue To Rise

The contraction in business activity in December last year was the most pronounced since back in October 2023. According to the Ulster Bank, business activity was down to 47.7 on the index, with anything under 50 considered to be a pull back. But on a more positive note staff levels continued to rise, indicating that most businesses believe that a corner is being turned and there are better times ahead.

First Reduction In Business Activity For More Than A Year

Here is what Sebastian Burnside, the chief economist at Ulster Bank’s parent company NatWest, said about the index results, as copied from an article on the Irish News website. He said:

“The Northern Ireland private sector ended 2024 on a softer note, recording the first reduction in business activity for more than a year on the back of a further decline in new orders.

“This represented a marked turnaround in fortunes for local firms as rapid growth was recorded through much of 2024, even through to as late as October, when Northern Ireland was the strongest performer across the UK.

“The labour market remained positive with employment continuing to increase despite the reductions in output and new orders.

“In fact, Northern Ireland was the only part of the UK to see a rise in staffing levels.”

What has brought about this reduction in business activity could be down to a number of factors, one of them being the concerns brought upon by the Autumn Budget Statement, which certainly caused ripples. But confidence amongst the business community in NI remains reasonably buoyant and it is a fair assumption that this is just a blip that we will have all forgotten about in 12 months time.