Business confidence is high despite ‘subdued’ growth

GROWTH in business activity here was more subdued than expected in April with stagnation for the construction sector, according to a major survey today.

The Ulster Bank Northern Ireland Purchasing Managers Index (PMI) for April showed a subtle acceleration in private sector business activity growth.

And although orders continued to increase for companies here, it was just at a slightly fast- er rate than March. That month had witnessed a 17-month low in business activity, as a result of disruption caused by extreme weather.

In April, business activity in the services sector — which covers everything from estate agents to restaurants — grew at the fastest rate, but was still below pre-downturn levels. And the report showed that employment rose as increased workloads prompted firms to recruit new staff.

Manufacturing was also “holding up well” during the month — but activity in the construction sector was “close to stagnation” and order books fell for the second month in a row. The retail sector also suffered.

Ulster Bank chief economist Richard Ramsey (left) said: “The March PMI saw a slowdown in growth resulting from factors including the Beast from East weather episode and it was anticipated that there would be a rebound in April.

“The latest report shows that this has indeed come to pass. However, it has been a more muted one than expected in NI and the UK as a whole, unlike the Republic which has rebounded with vigour.

“This suggests that the slowdown in Northern Ireland is related to underlying issues, rather than just a weather-related blip.”

He added that optimism was high in manufacturing: “Indeed, retail was the only sector to report a slide in business confidence for the year ahead.”

Strong export markets were the main factor behind manufacturing’s good performance and were providing a source of growth.

He said: “With manufacturers more exposed to international markets and retailers, as well as construction firms, much more reliant on the domestic market, this helps explain the differential in confidence within the sectors.”