NI economy recovering at faster rate than UK average

Northern Ireland’s economy continues to recover, with data for July pointing to both a pick-up in growth of both activity and new business. Employment also grew at a solid pace.

According to the latest PMI report by Markit,private sector output expanded sharply in July, as the headline seasonally adjusted Business Activity Index rose to 59.8 from 59.0 in the previous month.The thirteenth successive monthly increase in activity was faster than registered across the UK economy as a whole. Panellists attributed the rise in activity to an upturn in the domestic economy which had enabled them to secure higher levels of new business.

New order growth quickened slightly in July, with respondents reporting improving economic conditions across the UK. The construction sector posted the fastest increase in new business during the month, with the pace of expansion hitting a post-crisis high.

"The construction sector was again the star performer in terms of growth momentum, although the current period of expansion has been broad-based across the economy with manufacturers and service providers each posting faster increases in output in the latest survey period," said Richard Ramsey, chief economist Northern Ireland with Ulster Bank, although he noted that many local construction companies have been expanding their workloads elsewhere, particularly Great Britain.

Meanwhile, new export orders rose at a solid pace, with panellists highlighting the strength of demand from the Republic of Ireland.

Companies took on extra staff at a solid pace, albeit one that was slightly reduced from June. Meanwhile, the rate of cost inflation quickened for the second month in a row, but output prices again rose only slightly.