NI Economy: Business activity falls for first time in months

Business activity in Northern Ireland’s private sector fell for the first time in six months in July, according to a survey by Ulster Bank.

Every month the bank asks firms from across different parts of the economy about things like staffing levels, order books and exports.

It is considered to be a reliable indicator of economic performance.

The survey found the decrease in activity was caused by weak demand and the impact of inflation.

New orders fell across all four sectors of the economy, with the biggest declines in construction and retail.

Despite this, companies continued to take on new staff, albeit at the slowest rate in six months.

Ulster Bank’s chief economist in Northern Ireland, Richard Ramsey, said: “Just like the summer weather, business conditions took a turn for the worse in July.

“The near-term outlook is for a further softening in demand with new orders declining for the second month running.”

However, the survey suggested there had been some easing of the inflationary pressures that firms have been facing as well as an improvement in business sentiment about the outlook for the year ahead.

Mr Ramsey added: “While price pressures have hit demand in recent months, it is encouraging to note that inflationary pressures continue to moderate.

“Business conditions may have taken a turn for the worse in July but sentiment amongst local firms for the year ahead has actually picked up.

“The interest rate outlook has improved slightly but the dark cloud of no Stormont Executive looks set to remain anchored over the economy for the foreseeable future.”

Northern Ireland has been without a functioning executive since February 2022 as part of the Democratic Unionist Party’s protest against post-Brexit trading arrangements.

“Whether the new rise in optimism is well founded or misplaced – time will tell,” Mr Ramsey added.