Ulster Bank’s PMI shows Northern Ireland’s economy still in growth mode after post-lockdown wave

Northern Ireland’s economy returned to some form of normality last month, returning to more stable growth after a run out of the blocks when the lockdown was eased in late spring, the latest PMI report showed. of the Ulster Bank.

The widely watched monthly survey showed the private sector recorded its fourth straight month of output growth in July, but the rate of growth slowed.

There was a mixed performance across the economy, with the manufacturing and service sectors posting record growth rates in output and new orders, while retailers saw slower growth rates. . The construction sector, meanwhile, saw its performance reverse, said Ulster Bank in Northern Ireland chief economist Richard Ramsey.

“Production, new orders and employment in the construction industry all contracted in July with very steep rates of decline in incoming work and staffing levels. These difficulties within construction are linked to sharp cost increases and supply chain difficulties that have triggered a decline in confidence in the sector.

The performance of the economy over the past month has colored the mood for the year ahead.

“Construction and retail expect activity to decline 12 months from now,” Ramsey said. “However, services and manufacturing companies remain optimistic and expect strong growth in the coming year.”

A plus for the economy last month was a continued improvement in employment, with hiring in the retail and manufacturing sectors performing particularly well.

Businesses in Northern Ireland also confirmed inflation was rising across the UK, with input costs rising in the province for the fifth consecutive month.

“Manufacturing, construction and retail are all experiencing extreme input cost inflation with PMI readings of over 90. Northern Ireland’s private sector inflation rates were once again higher than in any other part of the UK,” Mr Ramsey said. “Along with cost pressures, supply chain disruption remains a major challenge for businesses.

“Brexit-related bureaucracy was the most frequently cited reason for a further extension of delivery times.”

The report also showed a further significant increase in delivery times from suppliers. The rate of input cost inflation hit a new record high for the fifth consecutive month, with strong increases seen in manufacturing, construction and retail trade.

He said a range of factors led to higher input prices, including higher costs for raw materials, personnel and shipping. In turn, producer prices also rose sharply. Companies remained optimistic about increased production over the coming year, but sentiment fell to a five-month low.

Pat R. Madsen