Post-Brexit vote economy in North stronger than expected

Ulster Bank’s index shows local firms securing more orders, especially exports

The PMI highlights that the retail sector, boosted by the continuing weakness of sterling, enjoyed the fastest rate of growth. Photograph: Dominic Lipinski/PA Wire

The PMI highlights that the retail sector, boosted by the continuing weakness of sterling, enjoyed the fastest rate of growth. Photograph: Dominic Lipinski/PA Wire

 

The North’s economy appears to be performing better than expected following the Brexit vote with business activity, new orders and employment all strong last month, new research suggests.

Ulster Bank’s latest Northern Ireland Purchasing Managers Index (PMI) released on Monday shows that local firms reported higher levels of business thanks to winning more new orders, particularly export contracts during March.

The PMI highlights that the retail sector, boosted by the continuing weakness of sterling, enjoyed the fastest rate of growth and in turn created more jobs than any other sector last month.

But the manufacturing, services, and construction also delivered a solid performance in output and job creation helping Northern Ireland to post an increase employment for the 26 month in a row during March.

Brighter

Richard Ramsey, chief economist Northern Ireland, Ulster Bank, said the latest data suggests that the economic picture might be brighter in the North than had once been predicted.

“Nine months on from the UK’s vote to leave the EU, Northern Ireland’s private sector has maintained its growth momentum as it enters the second quarter of 2017.

“Overall, the local economy has perhaps fared better than expected post the Brexit decision, with the main impact, positive and negative, so far being the weakening of sterling. But the long-term economic implications will only become apparent as what Brexit actually means becomes clear,” Mr Ramsey said.

He has also sounded a warning about “inflationary pressures” in the North which he said remain high because of the weakness of sterling.

According to Mr Ramsey these are now impacting on input costs and in turn on pricing structures to customers. He also believes the North’s current dependence on retail-sector growth while retail prices are rising rapidly is a key concern for the local economy.