Northern Ireland’s private sector economy showed signs of resilience in November, with the latest Ulster Bank survey indicating a lessened pace of economic contraction, marking the fifth consecutive month of such trends. The service industry, with the exception of retail, exhibited growth, signaling a potential pivot point for the local economy amidst broader challenges.
Key points from recent findings include:
- The services sector activity increased for the first time in five months, while manufacturing experienced job cuts for the first time in nearly a year.
- Despite higher wage costs due to recruitment difficulties, hiring has picked up in services, construction, and retail sectors.
- Retailers are bracing for tough times ahead owing to cost pressures, and the construction industry expects flat activity following a prolonged period of declining orders.
- The labour market remains robust with low unemployment rates and sustained hiring throughout November.
The optimism in the services sector is notable, with firms’ sentiment reaching a 22-month high. This optimism persists even though retailers have subdued expectations due to rising mortgage costs and tighter consumer budgets. Some businesses are hopeful for an economic rebound starting in 2024, supported by the positive outlook from service firms.
As Northern Ireland grapples with weak demand, fewer customer orders, and a decline in exports, the immediate future appears mixed. The construction sector is particularly affected by a bleak public finance forecast that could impact housebuilding. Yet, there’s an anticipation for official data that will shed light on services and manufacturing performance from July through September 2023.
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