NI business conditions disappoint

Business conditions for Northern Irish firms were disappointing in June, according to a new survey, with private sector activity showing a marked decline.

According to the Ulster Bank Northern Ireland Purchasing Managers’ Index, which provides a measure of the health of the industry, showed the sector shrank, with business activity falling for a seventh month in a row, but the sector’s pace of contraction slowed compared to May.

Ulster Bank’s chief economist for Northern Ireland Richard Ramsey said the first half of 2012 represented the weakest level of business output since 2009.

“On a quarterly basis, the pace of contraction, both in terms of output and new orders, accelerated in the second quarter relative to the first quarter,” he said. “Indeed, the continued decline in new orders suggests a distinct lack of momentum as we enter the second half of 2012.”

Mr Ramsey said the slowdown was particularly noticeable for exporters, as the ongoing euro zone crisis affected economic and financial conditions overseas.

“This is becoming increasingly evident within the local economy, with exports falling at their fastest rate since September last year,” he said.

There was some good news for firms, with inflationary pressures easing and the price of raw materials rising at their weakest rate since September 2009.

“However, lack of demand and competition are exerting downward pressure on the fees and charges of local businesses and therefore squeezing profit margins,” Mr Ramsey said.

The private sector also continued to lose jobs in line with previous trends, as workloads fell.