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Northern Ireland businesses enjoyed yet another increase in export orders with many winning new contracts in the south last month thanks to sterling’s continuing lacklustre performance against the euro, latest research shows.
According to Ulster Bank’s Purchasing Managers’ Index (PMI) for July business activity across the North’s private sector registered a “solid” monthly expansion with the service sector in particular recording its strongest growth rates since last March.
The latest PMI report highlights that job creation continued in Northern Ireland last month but at a slightly slower pace while inflationary pressures also decreased.
But although companies in the North in general reported a rise in business activity during July it was slightly behind the rates registered across the UK as a whole suggesting that Northern Ireland’s private sector may be nursing some worrying weaknesses.
The latest PMI report points to evidence that the local construction is facing challenges as research shows that the construction sector suffered another drop in new business - the fifth consecutive row in a month -although the retail sector which had been experiencing a slowing in demand saw sales stabilise last month.
Richard Ramsey, chief economist Northern Ireland, Ulster Bank, said the latest PMI shows that for some companies July was yet another month where they had to battle higher input prices driven by currency issues and increased staff costs.
“The reality is that the overall tone of the latest survey is characterised by slower rates of growth. Firms reported a slight slowdown in the rate of growth in business activity, with July’s figure at a nine-month low. Meanwhile, new orders and exports saw their growth rates quicken. The private sector has been increasing its staffing levels for the last two-and-a-half years. Last month, however, the pace of job creation slipped to a six-month low,” Mr Ramsey said.
According to the Ulster Bank survey business in the North remain optimistic about their future prospects.
Mr Ramsey said: “Despite the ongoing political and Brexit related uncertainty, Northern Ireland’s private sector remains relatively upbeat.
“Almost one-third of firms expect to have more work in 12 months’ time than they do currently. Optimists currently outnumber pessimists by more than two to one on this front.”