Data from the Ulster Bank Northern Ireland PMI from the latest report – produced for Ulster Bank by Markit – pointed to a rise in output activity following the previous month’s decline.
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That said, new orders decreased for the second successive month. The rate of input cost inflation accelerated to the fastest since November 2011 and firms also raised their output prices at a sharper pace.
Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said: "According to the PMI surveys, the UK economy has witnessed something of a 'V-shaped recovery' over the last three months.
"Business activity dropped in July, following the UK vote to leave the EU in late-June, before rebounding in August. Northern Ireland’s private sector performance has followed a similar pattern, albeit the rebound has been much weaker.
"Local firms reported a return to growth in activity in August but it was still the weakest rate experienced this year, and well below the pre-downturn long-term average. Furthermore, Northern Ireland’s private sector did not experience the recovery in new orders last month that occurred in the rest of the UK.
"Order books amongst local firms shrank for the second successive month. This is due to subdued domestic demand, as export orders increased; no doubt boosted by the fall in sterling.
"While the headlines may focus on a return to growth and ongoing job creation, these cannot conceal the notable weaknesses that lie beneath. In particular, the two growing concerns are the surge in inflationary pressures and stagnation within the local services sector.
"Last month, service sector firms reported their first fall in staffing levels in 39 months.
"With orders contracting for the last two months there is no sign that activity will improve anytime soon. It is a similar story for construction firms, which reported their fifth successive month of falling orders in August." ■
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