NI Records Fastest Fall In UK Output

Northern Ireland is being hit hard by the cold wind of recession with local businesses recording the steepest contraction in output of all UK regions.

As the global recession hits home and demand plunges, NI is said to be suffering more than anywhere and has also paid off staff at a much faster rate.

The deep fall-off in business came despite the sharpest price discounting ever recorded by Ulster Bank Northern Ireland PMI (Purchase Managers' Index).

The latest report covering December signalled that business conditions remained extremely tough at the end of 2008 as the adverse economic and financial climate led to a further rapid contraction of demand.

It did not hold out any hope of improvement in the near future.

The drop in business activity was only slightly less than the record hit in November, with all broad sectors registering marked falls, said the report.

It added that, with new business down sharply, firms continued to report significant levels of spare capacity, which they attempted to reduce through further cuts in employment.

There was a heavy discounting of prices as firms attempted to win new business and hang on to their market share.

As orders fell, companies reported reluctance among clients to commit to new projects at a time of heightened uncertainty - while continued tight credit conditions remained a drag on new business.

The steep decline in activity by the private sector firms extended the current period of contraction to 13 months.

Faced with depressed demand and substantial pressure to offer discounts, Northern Ireland firms lowered their charges for the third consecutive month in December, said the report.

(BMcC/JM)