Output Growth Slows To Nine-Month Low - Ulster Bank

The emergence of the Omicron variant led to a further decline in new orders, according to the latest Ulster Bank Northern Ireland PMI – produced for Ulster Bank by IHS Markit.

According to the report inflationary pressures remained elevated, but added that on a more positive note, a further solid rise in employment was recorded and firms were optimistic regarding the outlook for output in 2022.

Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said: "A resurgence of Covid-19 infections, linked to the omicron variant, in December acted as a headwind for growth throughout the UK. 11 of the 12 regions reported slower rates of expansion with one – the North East of England – posting a marginal contraction.

"Northern Ireland's private sector recovery almost ground to a halt in December with the rate of growth in business activity scraping just above the no change threshold of 50.0 at 50.2. That was the weakest rate of expansion for the 11 UK regions recording growth last month.
News Image
"No rapid improvement is anticipated anytime soon with new orders declining for the fourth month running and export orders contracting sharply, extending the current sequence of decline to 35 months. Inflationary pressures remain severe, while suppliers' delivery times continue to lengthen sharply.

"Despite these near-term challenges, local firms notched-up their 10th successive month of employment growth with all four sectors increasing their headcount. All sectors bar construction also anticipate strong rises in output by the end of the year. Retail, perhaps somewhat surprisingly given the cost-of-living pressures, is its most optimistic since March 2018. But with retailers increasing their prices at a record rate, it remains to be seen whether consumers will share that optimism.

"Northern Ireland's underperformance compared to the rest of the UK and the Republic of Ireland is due to the construction and services sectors. These two sectors saw activity fall in December whereas retailers and manufacturers posted growth. Manufacturing was the only sector to report a rise in new orders with retail, services and construction all signalling a drop in incoming work.

"2022 is going to be dominated by three economic themes that were prevalent at the end of last year – slower growth, severe inflationary pressure, and the stop-start disruption associated with Covid. This might ease in the second half of the year, however, don't forget Brexit. Whilst we should be over the hump of the pandemic by mid-2022, the same can't be said for Brexit as some of the current grace periods come to an end in July."

Related Northern Ireland News Stories
Click here for the latest headlines.

24 September 2008
Training Takes To The Road
A new mobile unit aimed at bringing retail training direct to employees throughout Northern Ireland has been launched by NI Employment Minister, Sir Reg Empey (pictured).
05 November 2010
Construction Downturn Defies 'Recovery'
Some parts of Northern Ireland's private sector are still growing despite a weak economic recovery that is underlined by continuing problems in the building sector. That's according to Northern Bank Chief Economist Angela McGowan (pictured) whose latest 'Quarterly Sectoral Forecasts' report forecasts annual growth of 1.0% overall for 2010 and 1.
06 December 2005
Smith signals future direction of NI economy
The future growth of the Northern Ireland economy lies in the development of the tradeable services sector. That was the message from Enterprise Minister, Angela Smith, who delivered the keynote address at the annual Exporter of the Year Awards last night in Stormont's Parliament Buildings.
11 June 2012
New Orders Down In NI Businesses
An economic report of private sector companies in Northern Ireland has found that new orders are falling and business activity is down. The Purchasing Managers’ Index for May shows a decrease across the board, and jobs have been cut for the sixth month in a row.
19 May 2014
Northern Ireland Retail Sector Shows April Recovery
NI Shopping figures have increased by almost 13% in April compared to the same period last year, according to the Northern Ireland Retail Consortium (NIRC). The vacancy rate in Northern Ireland was 17.2%, marginally improved from the previous quarter.