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Economic Development

Hiring splurge sees Northern Ireland economy bounce back but inflation headwinds gather strength

Latest PMI report from Ulster Bank showings companies rushed to take on new staff in May at a rate not seen in the survey's 19-year history

Richard Ramsey, Chief Economist, Northern Ireland, Ulster Bank

The Northern Ireland economy appears to be bouncing back from the Covid-19 pandemic with aplomb as rates of hiring hit levels not seen in more than 19 years.

That’s according to the latest Ulster Bank PMI report which revealed that private sector companies, particularly those in manufacturing, were rushing to hire to keep up with an upsurge in new orders in May, which itself hit a 40-month high, following the relaxation of movement restrictions.

All indicators surged close to or at record levels, reflecting the reopening of a swath of business sectors and pent-up demand.

Even the services sector, left battered and bruised by a series of lockdowns, poked its

head into positive territory when it came to new orders last month, the first time it has been in such a position since the pandemic took hold.

The only outlier was the construction sector which failed to see a pick-up in new orders for the sixth month in a row with incoming demand falling sharply. Countering that and perhaps offering a fillip for things to come, º£½ÇÊÓÆµ construction firms as a whole saw new orders hit the fastest growth rates to date.

And as with everything in the world of economics, there was a downside to the overall good news.

Rising costs meant input cost inflation surged once again, also hitting record levels while manufacturers, retailers and construction firms also ramped up prices.