Northern Ireland private sector sees solid rise in output in June

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  • July 7th saw the release of June data from the Ulster Bank Northern Ireland PMI. The latest report – produced for Ulster Bank by IHS Markit – signalled that growth was maintained at the end of the second quarter.

    Both output and new orders continued to rise solidly, albeit at softer rates. Employment rose further, but again, to a lesser extent than in May. The rate of input cost inflation also eased, slowing to the weakest for a year. Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:

    “The latest survey brings to an end the first half of 2017, and it shows that Northern Ireland’s private sector economy enters the latter part of the year with some momentum. Indeed, business activity has performed more strongly than perhaps would have been expected, with the services sector the star performer in the past quarter. In June, business activity continued to expand, but the rate of growth has been easing and currently sits at an eight-month low. This was due to a slowdown in retail, construction and manufacturing, with the services sector bucking the wider trend. On the positive side, employment and exports continue to rise, but the overall theme is one of easing, with these indicators expanding less robustly than in the previous month. Inflationary pressures are also easing from very high levels, however both input and output inflation remain elevated, which is a key concern for the second half of the year. This is particularly the case for retail and other consumer-sensitive sectors, which will continue to be impacted by pressures on consumer-spending due to rising prices, subdued wage-growth, and freezes in some benefits. Indeed, some local retailers are reporting that sales and orders both fell in June, and this is a trend that may well continue into the months ahead. Despite this, local firms remain positive about the outlook for the next 12 months. However, they are less positive than they have been, which reflects a number of factors including reduced consumer confidence, political instability, and ongoing negotiations around Brexit. None of these issues appears to be going away any time soon. Concerns around Northern Ireland’s public finances also remain; however they will have been eased somewhat by the recent funding package agreed with Westminster.”

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