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Construction and retail sectors hit hardest in North

September 20th, 2010

A SHARP decline in new business orders coupled with a marked rise in job losses last month pushed any economic recovery in Northern Ireland further over the horizon, according to latest research.

The results of a survey carried out by Ulster Bank shows the level of new business won by private sector firms in the North fell again in August for the 33rd month in a row.

The latest Ulster Bank Purchasing Managers’ Indexes (PMI) showed a sharp drop in new work last month across key industry sectors in Northern Ireland, with construction and retail particularly hard hit.

The fresh research confirms just how dramatic the economic downturn has been, and how the local economy is struggling in vain to escape the recession.

Richard Ramsey, Ulster Bank’s chief economist in Northern Ireland, said the North was currently the only UK region still experiencing falling levels of business activity.

The bank’s survey shows Northern Ireland has failed to record significant growth since November 2007.

In some cases, however, the local manufacturing sector has escaped the worst and is showing signs of growth.

Although the pace of decline in general has eased slightly, the impact of reduced public spending in the North is having a marked and highly detrimental impact in the overall economy.

This is a factor which is going to come increasingly into play once sweeping UK public expenditure cuts take effect later in the autumn.

Mr Ramsey believes this, combined with a lack of new business, is going to create a much more challenging economic environment in the North in the short term.

“The pace of job losses has accelerated in recent months, with the August survey reporting the sharpest fall in employment levels since April 2009. The rate of decline was markedly higher than any other UK region – a trend that has been apparent over the last 12 months,” he added.

Mr Ramsey said local companies blame “weak underlying economic conditions” for the continual slump in business, which is most severe in the building sector.

He believes the forthcoming public expenditure cuts will put further pressure on companies already battling with “negative profit margins” in Northern Ireland.

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