Brexit to blame for largest drop in output since 2012, says economist
BREXIT uncertainty contributed to the sharpest fall in economic output here for nearly seven years during September, an economist has said.
Ulster Bank chief economist Richard Ramsey spoke as the lender published the results of its September Purchasing Managers’ Index (PMI).
The survey involved featured input from 200 companies across Northern Ireland’s manufacturing, services, retail and construction sectors.
It found that output fell for the seventh consecutive month, with the latest reduction in Northern Ireland the strongest of the 12 UK regions covered by the survey.
New orders decreased for the eighth successive month, and at a pace that was the fastest since May 2012.
As well as affecting domestic demand, unease surrounding Brexit also impacted negatively on new export orders while new business from abroad declined to the greatest extent in just over eight years.
Business confidence slumped to the lowest since data on sentiment was added to the survey in March 2017. Brexit was the main factor pulling down confidence, with Northern Ireland again the only area of the UK to predict a fall in output over the coming year.
“The latest Ulster Bank NI PMI shows that the pace of decline in output, new orders, employment, exports and expectations all accelerated last month relative to August,” said Mr Ramsey.
“Notably, export orders at local firms fell to a 97-month low, which underscores that this is not just a Northern Ireland problem, and that global demand is weakening.
“Perhaps most notably, construction saw the fastest rates of decline in output, and new orders in the sector are now at an 82-month low. The manufacturing sector also reported its fastest pace of job losses in over 10 years.
“Looking ahead, Northern Ireland is the only UK region where firms expect output to be lower 12 months from now. This reflects the lack of confidence in the private sector at present, resulting from a range of factors, not least Brexit uncertainty.”
He added: “However, a year is a very long time in economics, and much can change quickly.”