Today sees the release of October data from the Ulster Bank Northern Ireland Growth Tracker. The latest report signalled that the Northern Ireland private sector continued to grow strongly at the start of the final quarter of the year.
Business activity again rose at the fastest pace of all UK regions and nations, while there were further solid increases in new orders and employment. Rates of inflation softened during the month, with input costs rising at the slowest pace since July 2023.
Sebastian Burnside, NatWest Chief Economist, commented:
“After an impressive third quarter of the year, the Northern Ireland private sector started the final quarter in a similar vein, recording rapid growth of business activity on the back of solid increases in new orders.
“Northern Ireland remained a standout performer across the UK, posting the fastest increases in output and employment. The latter rose solidly, despite ongoing reports from firms of difficulties recruiting staff amid a shortage of suitable candidates.
“Candidate shortages meant that wage pressures remained an issue for companies, but overall input costs increased at the slowest pace for 15 months. The good news on inflation was also seen with regards to selling prices, which increased at the softest pace since January.
“Despite the continued growth in the private sector, business sentiment dropped to the weakest in the year-to-date. The survey was conducted prior to the Budget and so we’ll be able to see next month what impact, if any, the changes to taxation and spending have on local company confidence.
“Looking at the sector breakdowns of the latest figures, it was positive to see all four categories recording increases in output, but retailers generally remained under pressure, posting reductions in new orders and employment and expressing pessimism for the outlook, not a great position to be in heading towards the all-important festive period.”
The main findings of the October survey were as follows:
The headline Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s private sector – posted 55.8 in October, down slightly from 56.0 in September, but still pointing to a rapid monthly expansion in output in the private sector as sales volumes improved.
As has been the case in each month of 2024 so far, new orders increased in the Northern Ireland private sector during October. The rate of expansion was solid, albeit the slowest since February. Three of the four monitored sectors saw new business increase, led by services. Retail was the only category to post a reduction.
Northern Ireland companies continued to expand their workforce numbers in October, extending the current sequence of job creation to 22 months. Although easing to a four-month low, the pace of job creation remained solid and was the sharpest of the 12 UK regions and nations covered. Some companies indicated that recruiting staff had been challenging given candidate shortages. Sustained job creation helped firms to work through outstanding business in October, thereby ending a four-month sequence of accumulation.
Although input costs continued to rise sharply during October, the pace of inflation eased for the fourth consecutive month to the slowest since July 2023. Higher wages were mentioned by a number of firms, while there were also reports of fuel costs having increased. In line with the picture for input costs, the pace of output price inflation also eased and was at a nine-month low. In fact, the rise in charges in Northern Ireland was the slowest of the 12 monitored UK regions and nations.
