Northern Ireland was the only part of the UK not to record an upturn in business activity in July, it was revealed today.
The latest Ulster Bank Northern Ireland PMI (Purchase Managers Index) showed output and new business levels in the Northern Ireland private sector both fell.
However the drop was at the slowest pace since May 2008, suggesting the recession had eased further in July.
But Northern Ireland continued to lag behind the wider UK as the latest index pointed to a moderate expansion of activity in the UK as a whole.
Richard Ramsey, Northern Ireland economist at the Ulster Bank, said: "Northern Ireland's private sector has now posted 20 consecutive months of output decline; however, the pace of decline has slowed for the fourth month in a row."
But he said: "Northern Ireland was the only region within the UK not to record an upturn in business in July."
He warned: "Looking ahead, the expected recovery will be weak, with new orders continuing to fall at a significant, albeit slower, rate."
More than a third of firms reported a decline in incoming business in July, the decrease in new orders 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 said.
"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 profit margins was particularly severe within the construction industry which, as a result, continued to bear the brunt of employment losses, said the economist.
Away from construction the other broad sectors of the economy also reported a further reduction in workforce numbers.
Companies reduced their workforces for the 17th month in succession — at an accelerated rate from the previous month — but at a considerably lower rate of job shedding than at the turn of the year.
Rising raw material prices were cited as having placed upward pressure on firms' input costs, with oil-related products mentioned in particular.
PA