There was another bump in output during August, with Northern Ireland experiencing the largest rise in activity in three out of the four months, when compared with other UK regions.
That’s according to the latest Ulster Bank Northern Ireland Growth Tracker. It says new orders also rose “markedly” once again, while staffing numbers rose at their fastest pace in 16 months.
The index stood at 55.7 in August, up from 54.9 in July (where 50 means no change).
Output has now risen in each of the past nine months, while companies said rising workloads had been behind the latest expansion of activity.
Manufacturing production increased at the fastest pace in almost two-and-a-half years, with services activity also up sharply, while retail was the only category to post a fall.
“The latest expansion of new business continued the trend that began in the opening month of the year,” the report said.
“Despite easing to a six-month low, the rate of growth in Northern Ireland was broadly in line with the UK average.
“Expectations that new business will continue to rise in the months ahead supported optimism among companies that output will expand over the coming year. In some cases, activity is set to be boosted by improving operating capacity. Business sentiment strengthened slightly from July and was well above the series average.
“Efforts to expand capacity in line with higher workloads led companies in Northern Ireland to raise employment again in August. Staffing levels have now increased in 20 consecutive months, with the latest rise the most marked since April 2023.
“The marked increase in employment was still insufficient to prevent a further build-up in backlogs of work, however, given sustained improvements in new orders. In fact, backlogs of work rose at a faster pace in August, with the rate of accumulation the strongest since April 2022.”
It said Northern Ireland companies continued to register a sharp rise in input prices, despite the rate of inflation easing to a six-month low.
“Respondents indicated that rising staff costs had been the main driver of increased input prices. Sharp cost inflation was seen across each monitored sector, led by construction. Meanwhile, the pace of output price inflation picked up slightly as increased input costs were passed through to customers.”
“There was no sign of a let-up in the performance of the Northern Ireland private sector in August, with local firms continuing to outpace all other UK regions and nations in terms of output growth,” Sebastian Burnside, NatWest chief economist, said.
“The sustained spell of growth has encouraged firms to take on extra staff, and they did so to the largest degree since April 2023. Such has been the speed of the inflows of new business, however, that companies were unable to make any dent in their backlogs of work which continued to expand markedly.
“Local firms remained optimistic about the future, and looking at this set of data it’s not hard to see why.”
