Business Declining: Ulster Bank

NI's Economic prospects are still stagnating, with construction still being hardest hit.

According to new figures just produced, Northern Ireland remains the only region within the UK not to experience an upturn in business activity last month. The latest Ulster Bank Northern Ireland PMI report said that the local economy continued to lag behind the wider UK economy.

However, data indicated that output and new business levels in the Northern Ireland private sector both fell at the slowest pace since May 2008, which suggests that the recession eased further in July.

Commenting on the latest survey findings, Richard Ramsey, Northern Ireland Economist, Ulster Bank, said: "Looking ahead, the expected recovery will be weak with new orders continuing to fall at a significant, albeit slower, rate.

"More than one-third of firms reported a decline in incoming business in July.

"The decrease in new orders was most intense within the services sector," he said.

"Unlike their UK counterparts, Northern Ireland firms continue to experience an increase in cost pressures for the fifth month in a row," he added.

"Meanwhile, the lack of demand continues to weaken the pricing power of Northern Ireland's firms, which in light of the rising cost base is squeezing profit levels.

"The pressure on these profit margins remains particularly severe within the construction sector and as a result, the construction industry continues to bear the brunt of employment losses."

That said, the other broad sectors of the economy reported a further lowering of workforce numbers as well.

Rising raw material prices were also cited as having placed upward pressure on firms' input costs, with oil-related products mentioned in particular.

In addition, the prices charged by Northern Ireland private sector firms were reduced again in July, albeit at the slowest rate since last November.

(BMcC/JM)