Modest reduction in business activity in Northern Ireland
Staff Writer |
The latest report produced for Ulster Bank by Markit signalled that the month following the UK’s vote to leave the EU saw declines in output and new orders in Northern Ireland.
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The headline seasonally adjusted Business Activity Index posted below the 50.0 no-change mark at 48.0 in July, down from 52.9 in June.
This signalled a modest reduction in business activity during the month, the first contraction since April 2015. Output also decreased across the UK economy as a whole. Respondents primarily attributed lower activity to uncertainty caused by the result of the EU referendum.
Of the four monitored sectors, services was the worst performer as activity decreased at the fastest pace since February 2013. New orders also contracted during July, ending a 14-month sequence of expansion.
As with activity, the decline was linked by survey respondents to the result of the EU referendum.
In contrast to the picture for total new business, new export orders increased during the month, as the weakness of sterling helped companies to secure new work from clients in the Republic of Ireland.
A decline in new orders contributed to a further monthly reduction in backlogs of work, the third in as many months. Moreover, the rate of depletion was the sharpest since April 2015.
Despite reductions in output and new orders, companies continued to increase staffing levels in July in line with future growth plans.
That said, the rate of job creation eased as some panellists mentioned delaying hiring decisions. ■
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