Northern Ireland’s economy continued its tentative recovery last month, with private sector business activity accelerating at its fastest pace in a year and companies rapidly hiring.
That’s according to Ulster Bank’s latest PMI report, which showed that business activity growth in Northern Ireland was only surpassed by London in a comparison of all 12 UK regions, with output, new orders and employment all rising faster.
The retail sector posted the fastest growth with PMI survey respondents reporting higher sales and improvements in customer confidence and demand.
Meanwhile, new orders also rose at their fastest pace in a year, while export orders also ticked higher for the second month in a row. In response, corporate hiring also increased, with the pace of job creation being the fastest in the history of the survey and the fastest of all 12 UK regions. That last move is perhaps the most surprising, given the already tight job market.
Inflationary pressures also continued to ease in March, recording their lowest pace in more than two years, but remaining above the pre-pandemic average.
Richard Ramsey, chief economist at Northern Ireland’s Ulster Bank, said momentum for the local economy continues to build, but warned that a number of headwinds could dampen growth in the coming months.
“While we see remarkable near-term improvements and companies are relatively optimistic for the year ahead, there are many challenges that will impact future growth,” he said. “The slowdown in the global economy is one factor, but the outlook for public finances is also bleak and this is exacerbated by the continued lack of a functioning Stormont Executive. Meanwhile, households will continue to grapple with a cost-of-living crisis.”
The only sector not growing last month was construction, an area hardest hit by a lack of political leadership in Northern Ireland.
“Construction was the only NI sector not in expansion mode in March. The lack of a Stormont Executive and paralysis in decision making is and will continue to be felt in this sector,” said Mr Ramsey. “This is reflected in the new orders indicator showing declines for 21 months in a row. In the latest report, construction was the only sector not to see new orders growing, and actually recorded a marked decline.
“One of the few bright spots for construction is employment, with a growing workforce as companies fill vacancies they may not have been able to fill when the labor market was tighter. Indeed, employment was strong across all sectors, growing at the combined fastest-ever pace and one that surpassed all other British regions.