Employment falls for first time in four years due to Brexit uncertainty

  • The latest report produced for Ulster Bank by HIS Markit indicated that business conditions across NI were subdued at the beginning of 2019, fuelled by Brexit uncertainty.

    A new report by Ulster Bank and HIS Market shows that new orders did increase marginally at the start of 2019, but that activity was at the weakest pace in 28 months and that companies lowered staffing levels for the first time in four years. Employment in January fell with a number of panellists reporting staff resignations.

    Despite a clear reduction in operating capacity, backlogs of work continue to fall and panellists reported working through outstanding business amidst a lack of new apparent orders. Input prices also rose at a faster pace in January than expected, with the inflation rate being at a five month high and confidence in the market remaining muted amid Brexit uncertainty.

    The latest rise in activity was the weakest in the current 28 month sequence of expansion, with subdued growth being recorded across the UK. Brexit uncertainty has not only limited the pace of growth but also restricted new order inflow. Despite this uncertainty, some businesses have been able to secure new business and secure new orders marginally.

    "Throughout 2018 the theme was one of ever slowing growth, with Q4 the weakest quarter in nine. This trend has continued into 2019, with January seeing private sector growth at a 28-month low. [...] The latest survey reports that staffing levels fell for the first time in four-years. Indeed, the Employment Index dropped to a 67-month low. Job losses in the services sector are the primary driver of this emerging weakness," commented Richard Ramsey, Chief Economist N.I, Ulster Bank.

    Ramsey gave a frank assessment of growth output in January, stating: "At a sector level, all areas bar retail posted output growth in January, but manufacturing growth eased and the expansion in services remained modest. When it comes to retail, it appears that consumer confidence is waning fast, with both retail sales and orders falling at a rapid rate. Indeed, retailers’ sales expectations for a year ahead hit a new low."

    Source: Ulster Bank Press Release

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