Growth was sustained in the Northern Ireland private sector in April, with activity up for the third month running. Employment continued to rise markedly as a result.
Third successive expansion in output
Employment up strongly again
Inflationary pressures weaken
Growth was sustained in the Northern Ireland private sector in April, with activity up for the third month running. Employment continued to rise markedly as a result. Meanwhile, rates of both input cost and output price inflation softened again and suppliers' delivery times shortened.
The headline seasonally adjusted Business Activity Index posted 53.1 in April, down from 54.9 in March but still signalling a solid monthly increase in business activity at companies in Northern Ireland. Output has now risen in three successive months. Activity increased in the services, construction and retail sectors, but dipped in manufacturing. Output growth was often linked to higher new orders, which also increased for the third month running. That said, the rate of expansion eased and was only marginal.
Rising new orders also encouraged firms to expand employment again, with some companies increasing staffing levels to try and work through outstanding business. Staffing levels continued to rise sharply. While higher wages and energy prices continued to push up input costs in April, the rate of inflation softened for the seventh consecutive month and was the weakest in close to two-and-a-half years.
Similarly, the pace of increase in selling prices was the least pronounced since December 2020.For the first time since the question on suppliers' delivery times was added to the survey in March 2021, vendor performance improved in April. Companies remained optimistic that output will continue to rise over the coming year, with confidence supported by improvements in new orders.
Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, commented:
"It was a generally positive start to the second quarter for all regions and nations across the UK, with business activity and inflows of new work rising across the board.
"It was also encouraging to see a general pick-up in hiring activity in April following a slower period for the jobs market in recent months, which has been helped by a recovery in business confidence. Expectations have strengthened considerably in all regions since the end of last year, and even improved further in April in just over half of cases.
"At the same time, the latest PMI data point to some stickiness in inflation. Despite signs that cost pressures faced by businesses continue to ebb from the highs over the past two years, average prices charged for goods and services actually increased more quickly in almost all areas in April, perhaps supported by stronger-than-expected demand conditions."