Sharp rise in new orders boosts NI private sector

New orders showed their sharpest rise in more than two years

Northern Ireland’s private sector economy continued to grow in May with new orders showing their sharpest rise in more than two years, an Ulster Bank survey suggests.

The monthly survey covers a representative sample of around 200 firms in the four main parts of the private sector.

It indicates that the job market remains strong, although there are indications that some manufacturers are cutting staff.

The strong job market also appears to be boosting wages which is feeding through to some prices.

Building momentum

"Retailers are recording the highest rates of cost inflation, in part linked to the rise in the National Living Wage, which is feeding into the prices that consumers pay," Ulster Bank’s chief economist Richard Ramsey said.

He added that on the other hand, construction costs are rising at their weakest pace in 45 months which is "perhaps an indication that material cost inflation is continuing to come back from record highs".

Mr Ramsey said that despite the continued challenge from inflation the NI economy appeared to be picking up some momentum.

"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.

"Northern Ireland’s performance compared favourably with other UK regions, with NI topping the league table for output and employment."

Later this week official jobs market data will be published along with figures showing the performance of the NI services and manufacturing sectors in the first quarter of this year.

They are likely to show a pick up in performance after economic output fell at the end of 2023.

Private sector output was flat in the final quarter of 2023, while public sector output declined, which may have reflected the impact of public sector strikes.

Most of these industrial disputes have since been resolved after the UK government provided money for pay deals.