Business

Northern Ireland’s economy gets shot in the arm from resumption of powersharing

Ulster Bank’s latest purchasing managers’ index points to pick up in output, new orders and employment

The increase in output in Northern Ireland was the strongest of the UK regions

Eoin Burke-Kennedy
Mon Jun 10 2024 - 05:30

Northern Ireland’s economy has enjoyed a strong bounce in activity since the return of powersharing arrangements in February.

According to Ulster Bank’s latest purchasing managers’ index (PMI), the North’s private sector recorded strong growth, with output, new orders and employment all increasing at sharper rates last month.

This extended a sequence of increased activity seen over the last six month but most significantly since February when the Northern Ireland’s powersharing executive was re-established following a two-year boycott by Democratic Unionists.

The increase in output in Northern Ireland was the strongest of the UK regions, the report said.

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Growth was recorded across all four broad sectors (manufacturing, services, retail and construction) led by manufacturing. Construction output also increased at the fastest pace in almost four years.

Ulster Bank also noted that responding companies responded to higher new orders by taking on extra staff at a solid pace, with the rate of job-creation at a 10-month high. Some firms also raised employment to prepare for future expansion, it said.

The report, however, noted that input costs continued to increase sharply, primarily as a result of rising wages. As a result companies increased their own selling prices at a marked pace that was sharper than seen in April.

Ulster Bank’s chief economist Richard Ramsey said: “The four months since the return of the Northern Ireland Executive have witnessed a strong private sector performance, and this shows no signs of slowing, indeed quite the opposite, with the pace of output, new orders and employment all accelerating in May.

“The big question, though, is how long the current growth spurt can continue. With a UK general election looming whoever comes into power after July 4th will have to grasp the nettle that is the UK public finances. More tax and less spending are inevitable and whatever form this takes it will be a headwind for private sector growth.”

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times

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