The recession is hitting businesses in the North harder than anywhere else in the UK, new figures indicated today.
Private sector activity in the region contracted at a faster rate than any other area of Britain during the first quarter of the year, according to the latest Purchasing Managers’ Index (PMI) survey.
The construction and retail sectors were the worst performing in the local economy since the turn of the year, the study on behalf of the Ulster Bank found.
With large scale redundancies announced at major firms such as Bombardier, FG Wilson, Visteon and Nortel in March, it comes as no surprise the PMI survey also reported a drop in the overall size of the private sector workforce in the North for the 13th month in succession.
Senior economist with the Ulster Bank Richard Ramsey said while most regions in the UK showed an improvement in economic activity in March, the North’s output continued to fall.
“According to the PMI, private sector activity in Northern Ireland has contracted at a faster rate than any other UK region during the first quarter of 2009,” he said.
“This is continuing the trend that was evident throughout 2008.”
He added: “Northern Ireland firms continued to reduce their staffing levels at a rapid rate in March.
“However, the pace of decline was more marked in the UK (as a whole), albeit marginally, for the first time in sixteen months.
“While all sectors of the economy reduced their respective headcounts in March, the rate of decline was most pronounced in the construction sector.”
The PMI also found that while local businesses continued to cut prices in an effort to generate demand, their input and production costs actually rose for the first time in four months.
It said the increased prices paid by firms for imported goods was largely due to the relative weakness of sterling.
Last week, Mr Ramsey warned that the Stormont Executive may need to call an emergency budget to tackle the recession.
He said ministers could be forced to follow their counterparts in Ireland and dramatically redraw government spending plans to help re-invigorate the struggling economy.
He claimed the projections laid out in the Executive’s three-year budget of 2008 were no longer realistic and some re-evaluation was required.