Northern Ireland鈥檚 business continue to create jobs at an impressive rate but the economy鈥檚 recent stellar growth is beginning to wane.
Those are the findings from the latest Purchasing Managers鈥 Index (PMI) report from Ulster Bank which showed the private sectors bounce back from the pandemic is losing momentum.
Its business activity index dropped to 52.1 in August from 54.1. Any reading over 50 shows a rise in output with last month鈥檚 increase the 鈥渟oftest in the latest sequence鈥.
The PMI takes the temperature of firms across Northern Ireland and found that output in manufacturing and services expanded while falling in construction and retail.
鈥淢ost of the 海角视频 regions saw business activity grow at a slower rate in August, and Northern Ireland was no exception,鈥 Richard Ramsey, Chief Economist of Ulster Bank in Northern Ireland, said. 鈥淟ast month marked local firms鈥 slowest rates of growth in output, orders and employment in five months. But a two-speed recovery was on show in August at a sector level.
鈥淢anufacturing and services firms saw some loss of momentum in August but still chalked up reasonable rates of growth in output and orders while staffing levels continued to rise at a solid pace. But retailers joined construction in contraction territory, with falling sales and orders. Hiring within retail though continued last month.鈥
The boost to the pique in activity in the services sector was put down to the further loosening of restrictions put in place during the Covid-19 pandemic.
Meanwhile, employment continued to rise at a solid pace as companies expanded workforce numbers in line with higher new orders.
However, backlogs of work continued to accumulate amid reports of staff shortages and supply-chain issues - suppliers' delivery times lengthened markedly again.
鈥淓lsewhere, the survey revealed again an all-too familiar story, with inflationary pressures and lengthening supplier delivery times. Within the 海角视频, Northern Ireland continues to report the steepest rises in input costs, with local firms raising the prices of their goods and services at faster rates than any other region.
鈥淧rice pressures linked to raw materials, fuel, freight, wages and Brexit continued to be cited by survey respondents. Inflationary price pressures in August eased only marginally relative to their recent record highs, although services firms raised their prices at the fastest pace in 13 years.
Looking ahead, there are a number of challenges for businesses to overcome, Mr Ramsey said.
鈥淚n the meantime, firms will continue to grapple with inflationary challenges, supply chain disruption, skills shortages and adapting to Brexit. But as we saw last week, increased taxation in 2022 will further add to businesses鈥 mounting cost burden.鈥
