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Economics

Ulster Bank PMI report for August 2023

New orders fall for third month running

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Key findings

  • Higher interest rates and cost of living crisis hit demand
  • Output falls markedly
  • Firms continue to increase employment

Business activity and new orders continued to fall in the Northern Ireland private sector during August as higher interest rates and the cost of living crisis took a toll on demand. On a more positive note, firms continued to take on additional staff. The headline seasonally adjusted Business Activity Index dropped to 45.7 in August from 48.2 in July, below the 50.0 no-change mark for the second month running to signal a drop in output in Northern Ireland's private sector. Moreover, the index signalled a marked reduction in activity and one that was the sharpest since January. Each of the four broad sectors covered by the survey saw activity decrease. Rising interest rates and the impact of the cost of living crisis on demand were reportedly behind the reduction in output, and also led new orders to decrease. New business was down solidly, and for the third month running. On a more positive note, companies increased their staffing levels again in August. The rate of job creation was solid, despite softening to the weakest since January. Although the pace of input cost inflation ticked up in the latest survey period, it remained relatively muted compared to the trend over the past three years. Higher wages were the principal cause of the rise in input prices. Output charges meanwhile increased at a marked pace. New product launches are predicted to lead to a rise in output over the coming year, with sentiment remaining relatively healthy in August. That said, confidence dipped from that seen in July.

 

Please see the report in full:

 

Ulster Bank Northern Ireland PMI (PDF, 3,636KB)

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