PMI: Northern Ireland’s economy surged in February ahead of Russia’s invasion of Ukraine
A MARKED improvement in the northern economy last month may be short-lived following Russia’s invasion of Ukraine, according to a new Ulster Bank report.
The lender’s latest Purchasing Managers’ Index (PMI) showed an increase in business activity in February, with new orders rising at the fastest pace in seven-and-a-half years.
The monthly survey, which reflects the experiences of 200 private sector companies in the North’s manufacturing, service, retail and construction sectors, is considered a reliable early indicator of the performance of the economy. .
It showed that February was the first month since June 2021 where all four sectors recorded growth.
But the subsequent impact of Russia’s actions in late February dramatically altered the economic outlook.
Ulster Bank Chief Economist Richard Ramsey said: “Commodity prices have soared and an unprecedented series of sanctions have been imposed on Russia.
“Companies therefore face a new source of supply chain disruption.
“It is clear that the main concern is for the people of Ukraine and the serious situation they are facing,” the economist said.
“But businesses and households here in Northern Ireland are also expected to be affected by the situation, most notably through runaway energy and food price inflation, as well as general uncertainty.”
The February PMI also revealed that private sector employers are struggling to find qualified staff, with the rate of job creation hitting its lowest rate in the past 12 months.
It left Northern Ireland with the slowest rate of job creation of the 12 UK regions assessed.
“Clearly, companies are struggling with skills shortages and struggling to find suitable candidates to meet the demand,” Ramsey said.
Amid strong growth in new orders, staffing shortages coupled with continued supply chain disruption led to order backlogs growing at the fastest pace in eight months.
There were signs that the inflation rate had eased before the Russian invasion. But drastically rising fuel and energy costs seem set to wipe that out.