Northern Ireland's private sector grows but 2024 prospects muted

Retail was among the sectors to see growth

Northern Ireland's private sector returned to growth in December but prospects for the year ahead are muted, an Ulster Bank survey suggests.

Every month the bank asks a representative sample of firms about issues such as new orders, employment and exports.

December was the first time in six months that there was an overall uptick in business activity.

Retail, services and manufacturing all saw growth.

However, construction is continuing to contract.

Ulster Bank's chief economist, Richard Ramsey, said the return to growth "could prove difficult to sustain" because the survey suggests new demand remains weak with order books shrinking for the seventh month running.

• Retailers 'relatively subdued' about 2024 prospects

Northern Ireland's labour market remained strong throughout 2023 with unemployment at record low levels.

Mr Ramsey said there are now signs that some manufacturers are beginning to cut jobs in response to reduced demand.

"Manufacturers reduced their headcount for the second month running with December's decline the sharpest in almost three years," he said.

"This suggests some manufacturing firms are adjusting their business conditions to the reduced external demand."

The latest official labour market data will be published on Tuesday.

Official data published last week suggested that Northern Ireland's economy grew in the third quarter of 2023, bouncing back from a contraction in the third quarter.

The quarterly expansion of 0.6% was driven almost entirely by the services sector, which is the largest part of the economy.

Many economists expect economic performance to be relatively flat in 2024 as households and businesses continue to deal with higher price levels and the impact of higher interest rates.