Ulster Bank PMI report for February 2024

Business activity rises at fastest pace in almost a year.

Key findings

  • Rates of expansion in output and new orders accelerate
  • Business confidence at 33-month high
  • Supply-chain delays caused by Red Sea crisis


Growth gathered momentum in the Northern Ireland private sector during February, with both output and new orders increasing at sharper rates. In turn, companies continued to increase their staffing levels. Meanwhile, shipping delays due to the Red Sea crisis caused longer delivery times and added to cost burdens. The headline seasonally adjusted Business Activity Index rose to 53.6 in February from 51.4 in January, signalling a third successive monthly increase in output in the private sector. Moreover, growth was solid and the fastest since March 2023.

Rises in output were centred on the manufacturing and services sectors, while construction and retail posted reductions. Respondents linked higher activity to rising new orders. In some cases, previously delayed projects have been released, helping to build a pipeline of new work. As such, new orders increased for the second month running in February. These factors also supported business confidence, which increased to a 33-month high as around 43% of respondents predicted a rise in output over the coming year.

Firms took on additional staff, although the pace of job creation was only slight. Meanwhile, there were some signs of capacity pressures returning as backlogs of work fell to the smallest extent in ten months. Disruption to the Red Sea shipping route caused suppliers' delivery times to lengthen, while also contributing to higher input costs. Rising wages also added to business expenses, resulting in the sharpest increase in input prices since May last year


Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, commented:

Northern Ireland’s private sector continued to benefit from increased demand in February. Business activity and new orders both expanded last month at their fastest pace in eleven months. However, the continued decline in export orders - 10 consecutive months of contraction - indicates that the pick-up in demand is largely domestically driven. “Services firms posted the steepest rise in business activity in February and alongside manufacturing, recorded its fastest rate of expansion in activity in twenty-two months. Meanwhile retail sales were broadly flat, with construction activity declining modestly in February."

Construction was the only one of the four sectors not to experience a pick-up in new orders last month, extending its run of falling demand to thirty-two months. “Despite the overall positive demand picture, local firms reported only a modest increase to their staffing levels. Resource constraints and recruitment difficulties were cited as factors limiting employment growth. “Inflationary pressures and supply chain disruption made an unwelcome return in February’s survey. Rising wages and higher shipping costs resulting from the Red Sea crisis helped propel input cost inflation to a nine-month high. This was most notable amongst manufacturers."

Manufacturers and retailers reported a marked lengthening in supplier delivery times. Encouragingly, this is not the case within construction. Indeed, construction firms continued to report a shortening in their supplier delivery times and input costs within the building industry eased to their lowest rate in forty-four months. “The return of a Stormont Executive has undoubtedly boosted business confidence, with Northern Ireland’s private sector its most optimistic about future activity in thirty-three months. Some survey respondents said that an unblocking of previously delayed work is helping to build a pipeline of new activity. Sentiment was particularly strong amongst manufacturers, with optimism about future output at a record high.


Please see the regional report in full:


Ulster Bank Northern Ireland PMI (PDF, 1,360KB)

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