NI business decline runs into 35th month

After 34 months of a downward trend in business activity in Northern Ireland, there will be little surprise at the Ulster Banks release of its Purchasing managers' index (PMI) for last month showing that October made it month 35 of business levels going in the wrong direction.

What will cause concern however, is that the rate of decline in business activity is seemingly gathering pace - October saw the fastest rate in activity decrease for the last 3 months, while the rest of the UK posted its strongest rate of growth in 3 months. Chief economist at Ulster Bank, Richard Ramsey, said the statistics show "that the two economies continue to move in opposite directions."

The report shows how new business has decreased significantly in Northern Ireland, as well as an increase in unemployment, albeit at its slowest rate since May, and evidence of a regular practice of discounting output prices. There is a large element of 'chicken and egg' to the problems weighing down the Northern Ireland economy - low levels of new business mean prices are being lowered in order to compete and the resulting fall in profitability is resulting in the need to shed staff. Only the manufacturing sector has seemingly avoided falling into this cycle of decline as it was the only area to report growth over last month.

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