Ulster Bank: Economy growing but inflation hitting confidence

Retail was one of the sectors that saw growth in March

Northern Ireland's private sector continued to grow in March but inflation is hitting new orders and business confidence, a survey suggests.

The Ulster Bank's monthly survey of private sector activity is considered to be a reliable indicator of the economy.

It suggests retail, services and manufacturing all saw growth in March.

However construction, which has been most exposed to supply chain problems, reported a fall in output.

The bank's chief economist Richard Ramsey said weakening new orders and persistently high inflation meant businesses were anticipating a weaker performance later in the year.

"With these inflationary pressures, combined with supply chain disruption and ongoing skills shortages, private sector firms reported a big fall in confidence regarding the year ahead," said the economist.

Most sectors anticipate output will still rise in the next year, but their expectations have moderated.

"Manufacturing is still the most optimistic sector, followed by services," Mr Ramsey said.

"But construction firms expect no growth over the next year and retailers anticipate a fall in output."

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This survey echoes findings from the NI Chamber of Commerce.

Last week it said its members had experienced a continued recovery in the first quarter of 2022 but were less confident about the rest of the year.