ANY SIGNS of a local economic recovery in Northern Ireland are “in short supply”, according to a survey published today, which shows that private sector business activity declined again last month.
According to the latest Ulster Bank Purchasing Manager Index, private sector output fell for the 19th consecutive month in June.
The hardest-hit sectors were manufacturing, services, retail and construction.
Weak customer demand and a lack of new business were identified as two of the key reasons why the pace of decline in the local economy picked up speed last month.
The knock-on effect of this was further job losses across the private sector in June.
In contrast to the Republic, where staff jobs fell “modestly” in the three months to June, the pace of job cuts in Northern Ireland accelerated last month, with the construction sector suffering the highest casualties in terms of job losses.
Richard Ramsey, Ulster Bank’s chief economist in Northern Ireland, said that in contrast with the overall trend in the UK, which shows on average a rise in private sector activity in the majority of regions, Northern Ireland was battling to retain jobs and business.
“Overall, employment within the local private sector fell at its fastest rate in seven months,” he said.
“This was largely due to the steep rise in job losses within the service sector.”
Mr Ramsey said inflationary pressures remained one of the key challenges for Northern Ireland businesses which he were facing “significant headwinds”.
“Local firms continue to report greater inflationary pressures than other UK regions.
“Furthermore, due to poor demand and strong competitive pressures, pricing power amongst local firms remains particularly weak. As a result, the squeeze on profitability appears to be more marked amongst local firms than in other parts of the UK,” Mr Ramsey added.
“Significant price discounting remains a feature within the services and construction sectors. The intensity of the profit squeeze within Northern Ireland’s construction sector reached a new record level in June.”
