PMI: Northern Ireland economy remains active but inflationary pressures will weigh in coming months

Northern Ireland’s economy is struggling with runaway inflation, but activity still manages to grow.

That’s the key takeaway from Ulster Bank’s latest PMI report which says companies reported weaker growth rates in output, new orders and employment in April, along with a rise input costs.

He said the PMI for Northern Ireland stood at 54.8 last month, down from 56.3 in March and continuing a decline in activity that began in January; a rate above 50 reflects growth.

Cost pressures remain the most dominant pressure on businesses, with input costs rising at the second highest rate on record, a situation that has prompted businesses to raise prices at the fastest pace since the start of the crisis. PMI survey 20 years ago.

From a sector perspective, manufacturing managed to grow last month, but production and new orders saw a marked slowdown in growth. The services sector, however, bucked the trend, recording faster growth rates in new orders and employment in April. Once again, construction recorded a drop in production and a sharp drop in new orders.

Persistent labor shortages across the economy were also cited as a prominent feature of the April report, as manufacturers and the service sector continued to struggle to find the right skills.

Added to still strong demand, order books also increased sharply, a situation accentuated by the extension of delivery times from suppliers.

Richard Ramsey, chief economist at Ulster Bank in Northern Ireland, said there was cause for optimism in the short term, but the rest of the year could be difficult for many companies.

“These arrears should ensure relatively strong growth rates in retail activity in the near term, but optimism for the year ahead remains relatively subdued, with the cost of living crisis making retailers less optimistic for the future. coming year,” he said. “With the economy set to deteriorate in the second half of the year, the business community is hoping for the rapid formation of a Northern Irish executive to help tackle short-term challenges and push forward long-term reforms and investments. indispensable.”

Pat R. Madsen