Manufacturing shines during an April pick-up for Northern Ireland economy
MANUFACTURING in Northern Ireland had its best month in just over two years in April with companies in nearly all sectors seeing a sharp rise in new orders, a report said today.
The Ulster Bank purchasing managers’ index (PMI) for April said confidence was high during the month and more jobs were being created.
And while input costs increased rapidly, selling price inflation had eased.
Richard Ramsey, chief economist at Ulster Bank NI, said: “Northern Ireland’s private sector continued in expansion mode at the start of the second quarter.
“Local firms chalked up their fifth successive monthly rise in business activity in April, albeit the pace of growth was slower than in March.”
He said the services, construction and retail sector reported slower rates of output growth, though manufacturing bucked the trend.
“Manufacturers posted their fastest rate of output growth in 25 months during April. Outside of the pandemic period, it was the strongest rate of manufacturing output growth since September 2014.
“Three of the four sectors witnessed a pick-up in new orders with only services reporting a slowdown.
“Manufacturers recorded their best month for new business in two years while construction firms reported their highest rates of new orders in three-and-a-half years. The latter is somewhat flattering given how subdued construction activity has been in recent years.
“Rising demand was accompanied by the first increase in backlogs of work in 12 months. Firms have responded by increasing their staffing levels at a faster rate than all other UK regions.”
But he said inflationary pressures had gotten worse, with input costs up at the fastest rate in 12 months.
“The increase in shipping costs was cited alongside rising wages and specifically the April uplift in the National Living Wage.
“These cost pressures are most apparent amongst retailers with this partly due to the significant lengthening of suppliers’ delivery times and increased costs resulting from the ongoing Red Sea disruption.”
And firms in NI were very optimistic about the outlook for a year’s time, he said. “The number of firms expecting output growth outnumbers those anticipating a decline by more than four to one.
“Overall, the latest survey offers encouraging signs about the state of the local private sector. However, the challenges facing the public sector remain and these will impact on parts of the private sector in due course.”
The April Ulster Bank report was published as data showed the UK economy rebounded out of recession with faster-than-expected growth over the first quarter of 2024.
The Office for National Statistics said gross domestic product (GDP) is estimated to have risen by 0.6% between January and March.
It comes after two-quarters of decline — which represents a technical recession — in the back half of 2023.
A consensus of economists had predicted a 0.4% improvement for the latest quarter.
Liz Mckeown, ONS director of economist statistics, said there had been “broad-based strength across the service industries with retail, public transport and haulage, and health all performing well”.