The north’s manufacturing sector saw output and new orders expand at the fastest rate in 27 months during June, a new business survey suggests.
Ulster Bank’s latest purchasing managers’ index (PMI) showed the Northern Ireland private sector ended the second quarter of the year comfortably inside growth territory.
The monthly survey, which tracks the performance of 200 construction, services, manufacturing and retail firms, suggests new orders increased at the fastest pace since February 2022, feeding through to a marked rise in business activity.
“The latest PMI wraps up the first half of 2024 and shows that NI’s private sector is in a much better condition than it was in January,” said Ulster Bank’s chief economist Richard Ramsey.
“Most of the key indicators have improved significantly in that period, with output, new orders and employment all markedly higher in the second quarter against the first.
“Growth in order books has been accelerating almost every month in 2024 and June represented the fastest rise in 28 months.”
The growth in new orders recorded in June’s PMI put Northern Ireland at the top of the table of the 12 UK regions assessed.
However, the research suggests export orders have now fallen for 14 consecutive months, meaning the growth is being driven by domestic demand.
“Whilst all four sectors have been in expansion mode, it is manufacturing that is the star performer,” said Mr Ramsey.
“Manufacturing output and orders expanded at their fastest clip in 27 months, but despite this demand, manufacturers’ staffing levels fell for the third month running.”
Despite concern over the future of jobs at Northern Ireland’s biggest advanced manufacturer, Spirit Aerosystems, many firms are still struggling to find and replace workers.
The labour shortages coupled with growing demand is creating greater backlogs for firms.
“This situation looks set to intensify, with manufacturers’ optimism for output in 12 months’ time hitting a series high,” added Mr Ramsey.
“Manufacturing’s strong demand is being accompanied by inflationary pressures, with input costs rising at their fastest pace in 16 months.
“These costs are being passed onto customers, with output prices rising at their fastest pace in 14 months.”
However, the June PMI suggest inflation in the construction prices has eased to the weakest pace in almost four years.
“The latest figures have been compiled in the mouth of a General Election.
“But the private sector, like households, eagerly awaits announcements from the next government.
“An emergency budget is expected, the only questions are when, and what will be in it?”
