Posted on Monday 9 December 2013 by Ulster Business

Ramsey

The economic recovery gathered momentum last month as private sector firms saw an increase in activity and new orders, according to the Purchasing Managers Index survey by Ulster Bank.

The latest report – produced for Ulster Bank by Markit – said new orders accelerated to multi-year highs leading to increased backlogs in work at firms across the different industry sectors.

But the survey also indicated that the rate of job creation had eased, while cost inflation picked up and remains faster than the UK economy average.

Commenting on the latest findings, Richard Ramsey, Chief Economist for Northern Ireland at Ulster Bank, said: "Last week's Autumn Statement saw the biggest in-year upward revision to the UK's economic growth forecasts in 14 years. Stronger growth in the UK economy is clearly good news for local firms and by extension the Northern Ireland economy as a whole. Indeed the latest PMI survey for Northern Ireland reveals that local firms, across all sectors, are not missing out on the economic recovery being experienced at a national level.

"Northern Ireland businesses reported a marked acceleration in business activity in November and extended the current run of growth to five successive months. The business activity index crossed the 60 mark for only the second time in the survey's 11-year history and represented the fastest rate of growth since March 2004. This provides some indication of the scale of the turnaround that a growing number of local businesses are now experiencing. Furthermore there are no signs that this pick-up in activity is set to fade."

The economist said that the growth in new orders suggests the momentum is set to continue into 2014.

"Last month local businesses reported the sharpest increase in new orders in almost 9 1/2 years with this improvement evident across firms within the manufacturing, construction and services sectors. The latter posted the sharpest increase in new orders of all sectors with November representing the service industry's best month since the credit crunch officially began in August 2007," he said.

"With their current staffing levels, manufacturing and service sector firms are struggling to cope with the recent surge in demand. As a result, firms within these sectors are reporting mounting backlogs of work. Indeed, last month saw the level of business outstanding (i.e. work not yet started or completed) rise at its fastest rate since the PMI survey began in August 2002.

"Whilst the recovery has clearly taken hold in terms of output and orders this hasn't yet translated into employment growth to the same extent. However, given the rising backlogs that firms are reporting, particularly in the services sector, this may give more businesses the confidence to recruit in the New Year."

To see Richard Ramsey talking about the latest PMI report click here.

 

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