There was a small increase in overall business output during January, according to the latest purchasing managers’ index from Ulster Bank.
That rise was buoyed by rises in retail, manufacturing and services. However, there was a sizeable contraction in Northern Ireland’s construction sector – posting 39.8, where 50 means no change.
However, export orders have continued to fall at a “significant” rate.
“Northern Ireland’s private sector started 2024 on a stronger footing with most of the indicators of business conditions improving relative to December,” Richard Ramsey, chief economist Northern Ireland, Ulster Bank, said.
“Output expanded for the second month running with manufacturing, services and retail all recording increased levels of business activity in January. Construction remained an outlier with activity falling at a substantial rate and at its fastest pace in 12 months.
“Despite a continued slump in export orders, a notable pick-up in domestic demand led to the first rise in new orders in eight months. A surge in retail demand and a return to growth in manufacturing orders more than offset the continued declines in services and construction.”
Northern Ireland saw modest growth in January, behind several other UK regions, including London, which saw the biggest surge.
“Some firms highlighted that re-routing of shipping away from the Suez Canal had caused longer delivery lead times,” Mr Ramsey said.
“But there was no overall change in supplier delivery times amongst manufacturers in January. Manufacturers have been cutting their prices for the last eight months and reduced them in January at their fastest pace since February 2010. Services, construction and retail though all raised prices at a quicker pace.
“Staffing levels continued to rise with manufacturing (marginally), services and construction firms all increasing their headcounts. Meanwhile retailers reduced their staffing levels for the first time in 16 months.
“The biggest surprise in the latest survey was the surge in business confidence. Local firms were their most optimistic about future output levels (in 12 months’ time) since May 2021. The positive sentiment was evident across all four sectors.
“The renewed optimism was linked to the launch of new products and higher orders. Significantly, the notable improvement in the outlook predates the restoration of Stormont. The impact on sentiment of the political developments should become apparent in February’s survey.”