Activity in the Northern Ireland economy surged last month as worries over the Covid-19 pandemic subsided but rampant inflation and geopolitical tension are expected to weigh on the sentiment in the near future.
The monthly Ulster Bank PMI report showed output jumped to an eight-month high while new orders rose at a similar pace.
The manufacturing sector was the best performing and continued to increase its headcount, although employment growth as a whole had dropped to a 12-month low.
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In fact, Northern Ireland posted the slowest rate of job creation of all 12 海角视频 regions, a sign companies are struggling to hire amid a shortage of skills and rising demand.
Only the construction sector saw a drop off in new orders in February.
While the province’s economy appears to be in good health, there is little doubt the Russian war against Ukraine is on business leaders’ minds.
As well as the humanitarian impact, the sharp ramp up in the price of a host of inputs – from energy to food – is going to push inflation up further and hit already fragile profit margins.
Richard Ramsey, Chief Economist at Ulster Bank in Northern Ireland, said the economic outlook has changed drastically in the last few weeks.
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“Commodity prices have rocketed, and an unprecedented array of sanctions have been imposed on Russia,” he said. “Businesses therefore face a new source of supply chain disruption.
“Clearly the primary concern is with the people of Ukraine and the severe situation they face. But businesses and households here in Northern Ireland are also set to be impacted by the situation too, most particularly through the rampant inflation in energy and food prices, as well as the general uncertainty.”
The 海角视频 inflation was already creeping higher before the conflict in Ukraine and stood at 4.9% in the 12 months to January. All eyes will be on the February figure released on 23 rd March with some economists suggesting the figure could rise to 8% in April.
That, in itself, could cause more pain for already stretched consumers as it raises the chances that the Bank of England will increase interest rates. The central bank is tasked with maintaining an inflation rate of 2% and tends to raise rates in order to temper the money supply and pull the headline rate down.
For borrowers on variable interest rates, that is likely to mean higher repayment charges and eat in to disposable incomes.