Service sector fuels North’s economic growth

THE North's economy has maintained its recent good form with a further increase employment and business output.

The latest Ulster Bank Purchasing Managers' Index (PMI) for the Province shows that April saw the upswing in business sentiment continue boosted by the continued growth of the services sector, which was showing the strongest growth.

At 58.3, the PMI index was well above the 50 point mark which signals growth in the economy. A reading below 50 means a contraction of activity.

The PMI survey found that the rise in overall business activity was a response to the sustained period of growth in levels of incoming new business to Northern Ireland firms.

April was the thirteenth consecutive month of gains in new business orders for firms in the North, though the level of increase was lower in the previous month.

Ulster Bank said despite this slight easing, around a third of all companies reported an increase in their new order volumes. The bank's chief economist Pat McArdle said the PMI reading was in line or slightly above the average for the British economy as a whole.

“The recovery is driven by new business, which remains buoyant particularly in the service sector. Employment growth, though moderate, is clearly in positive territory whereas it was negative for much of last year,” Mr McArdle said.

“Prices charged have now begun to tick up reflecting the more buoyant economy,” he added.

Mr McArdle also reported that firms are responding to the latest rise in their outstanding workloads and the sustained expansion of new incoming business by recruiting additional staff.

The pace of growth of employment remained only modest, but nevertheless slightly above the British average, Ulster Bank found.

Increased marketing and promotional activities again helped firms to tap into the robust levels of underlying demand, the bank said.

But there was also some pressure recorded, with higher wages and salaries and rises in other business costs hitting firms.