Brexit blamed for drop in business activity in Northern Ireland
Northern Ireland businesses blame Brexit for drop in business activity, according to a new economic report
Northern Ireland businesses blame Brexit for a sharp drop in export orders last month according to a new economic report, which shows there was a further slump in business activity during May. The North’s employment numbers also fell for the fifth month in a row.
The latest Ulster Bank Northern Ireland Purchasing Managers Index (PMI) highlighted “further marked reductions” in both output and new orders in May as the North’s private sector remained firmly in contraction mode.
According to Richard Ramsey, Ulster Bank’s chief economist in Northern Ireland, companies in the North had been stockpiling at a rapid rate in advance of the original Brexit departure date, March 29th. However, when the UK was granted an extension, this had a significant impact on business activity in the North.
Ramsey said, what the latest PMI suggests is that the global slowdown which had been impacting other economies is now clearly evident within Northern Ireland. Brexit stockpiling by manufacturing companies had been inflating the performance of local firms in recent months.
He said, now that the rapid phase of stockpiling activity has passed, the latest PMI data reflects the reality of current demand. This is weakening in both the domestic and overseas markets, with output at a 76-month low and orders falling at an 81-month low.
The latest PMI report underlines how output fell across all four sectors in the North for the first time in six years.
The construction sector had seen orders fall for nine months in a row while retailers had also reported a slump in sales since the beginning of the year but both the manufacturing and services sectors also suffered significant declines during May and current order books do not suggest that this trend is likely to be reversed anytime soon.
The combination of Brexit uncertainty, which will continue to dominate the agenda both at home and in export markets, plus the double negative of a lack of government at Stormont, is just some of the factors, according to the PMI report, why Northern Ireland firms are currently “the least optimistic in the UK”.