Expansion in Northern Ireland's private sector continued to slow during December, despite steady product demand and expanding new orders, according to the latest Purchasing Manager's Index (PMI).

Growth eased for the fifth month in succession, with the PMI output index reading 53.7, down from a two-year high of 62 in March of last year.

The figures for new business (52.6) were broadly similar, as volumes increased for a 21st successive month, but maintained the slowdown that began in April.

Any reading above 50 indicates growth on the previous month, while any result below that signals a contraction in activity. The corresponding figure for the Republic's business activity stands at 56.9, a slight rise over the previous three months.

Weaker client spending has been blamed for the slowdown, which leaves Northern Ireland slightly lagging the rest of the UK, according to the data produced by Ulster Bank.

In contrast, the private sector workforce continues to grow at a steady rate and remains above the UK average but slightly below that in the Republic. The employment index of 52.2 reflects the need to deal with higher workloads created by increased new orders and backlogs.

Input costs and prices charged continued similar trends. High steel prices, increased labour costs and transport prices are keeping operating costs high at 64.3, well above the 50 no-change mark. However, a fall in global oil prices in December meant that inflation was at its lowest since January.

Most firms who raised their prices said they did so because of the increase in costs. There was, however, a slowdown from 55.2 in November to 53.4. Strong competition was reported to have been a factor.

The PMI is a monthly barometer of business activity made up from a representative panel of companies based in Northern Ireland covering the manufacturing, service, construction and retail sectors.