Activity in the Northern Ireland economy has contracted at the fastest rate in nearly two years on the back of rising costs and waning consumer confidence.
That is according to the latest PMI report from Ulster Bank which revealed the sixth consecutive contraction for the province’s private sector, as well as a decline for the other 11 regions of the UK.
All four sectors of the economy reported a slump in activity and respondents to the survey said they expected further decline over the next year.
The news comes on the back of confirmation of wider economic malaise from official government data which showed the UK economy contracted by 0.2% between July and September. That news is the first hint of recession, which is officially declared following two consecutive quarters of contraction.
The PMI data, meanwhile, showed the Northern Ireland economy is being hit hard on all fronts by the current headwinds.
New orders, for instance, declined at the fastest rate since 2011, a time which encompassed the fallout from the credit crisis and subsequent financial crisis. The province also posted the largest fall in incoming work of all UK regions.
Soaring inflation has been blamed for much of the decline, Ulster Bank’s chief economist Richard Ramsey said.
"The sources of inflationary pressures remain broad-based encompassing wages, raw materials, energy and shipping costs,” he said. “Output price inflation remained elevated but well down on the record rates posted earlier in the year. Indeed, firms raised the prices of their goods and services at their weakest rate in 19 months.
"Given the evolving ‘cost of everything’ crisis it is not surprising that business confidence sank to a 26-month low.”
Offering some succour was the fact all four sectors - manufacturing, services, retail and construction – all increased staffing levels, although companies surveyed suggested that was a result of historical labour supply issues.
Looking ahead, there is little positive news in the short term.
“Sentiment is not likely to improve anytime soon with this week’s Autumn Statement expected to yield more fiscal pain rather than comfort,” Mr Ramsey said.
