Ulster Bank PMI: Spend Local program boosted economic activity last month
A rebound in the retail sector driven by the executive’s £ 100 voucher scheme spurred a slight uptick in economic activity in Northern Ireland last month.
That’s according to Ulster Bank’s latest PMI report which found retail sales rose in November for the first time in four months.
The increase in buyers helped push the PMI to 52.9 last month from 52.2 in October. Any reading above 50 denotes an increase in business activity.
The move follows the roll-out of the executive’s High Street voucher scheme, which gives everyone over the age of 18 £ 100 to spend at local retailers. This boost is expected to remain in place as Christmas approaches, with the program deadline extended to 19 e December, amid concerns, all eligible applicants had not yet received their cards.
Outside of retail, the manufacturing sector was the best performer with growing production, orders and employment. Services experienced their weakest rate of expansion in eight months with stable orders while the construction sector recorded its fifth consecutive month of contraction.
Meanwhile, the PMI showed that the labor market remains strong with robust employment growth rates, with all four sectors increasing their workforce last month.
However, Northern Ireland’s recovery remains lagging behind the rest of the UK, with the province recording the slowest growth rates in business activity after the north-east of England, said Ulster Bank Chief Economist Richard Ramsey.
He also warned that businesses in Northern Ireland are experiencing the highest rates of input cost inflation, causing companies to raise prices at an all-time high.
That, and a number of other headwinds, shattered optimism.
“For the first time since the pandemic, however, the private sector in Northern Ireland was not the most pessimistic about 12-month production in the UK,” Mr Ramsey said. “Local business optimism for production peaked in six months, with sentiment improving across industries.
“Only the north-east of England was less optimistic. That said, since the completion of the survey, the emergence of the Omicron variant has reintroduced more uncertainty and clouded the outlook for companies operating in the hospitality industry. Covid’s confidence clearly trumps consumer confidence and, in turn, this will affect economic growth. “