Using a panel survey of Invest NI supported businesses the Invest NI PMI tracks changes in business conditions and activity. It tracks business output, new orders, employment and prices.
Output and employment accelerated amongst Invest NI supported businesses in the first quarter of 2016 following a slowdown in the second half of last year. Looking back, a two year period of expansion has now been achieved since the survey started in 2014. Over this period, the rate of growth amongst Northern Ireland supported businesses has been consistently stronger than the Northern Ireland private sector as a whole.
Improving economic conditions and higher demand are expected to feed through into higher output over the year.
Encouragingly, 82% of businesses expect activity to expand in the next 12 months, compared to only 5% who anticipate a decline. Improving economic conditions and higher demand are expected to feed through into higher output over the year.
Commenting on the survey results, David Roberts, Invest NI’s Economist said: “The latest PMI results suggest a healthy level of optimism for the NI economy over the next few months. New orders are up as is new business from overseas, albeit not as strongly as in markets closer to home. Sustained marketing and sales activities are paying off.
"Companies reported that cost pressures remained substantial, although more firms reported being able to raise prices than in 2015. More expensive imports and higher staff costs were highlighted as the two key cost factors. Whilst sterling’s recovery against the euro in the last month or so will have eased some of this pressure, competition to attract and retain high quality staff remains high. The need to expand the pool of individuals with the right skills and experience across a number of sectors in Northern Ireland remains as important as ever.
"The other key feature of the quarter one results is the very strong optimism regarding future growth prospects. The past few months have seen high profile closures/job losses being announced at JTI, Michelin and Bombardier. Whilst these announcements are difficult for everyone involved, the PMI results highlight that job prospects are brighter across a broad range of firms. Three in five of the firms completing the survey are in the manufacturing sector. Invest NI will continue to work closely with firms in both the manufacturing and the service sectors to ensure that the growth projections are realised”.
Author: David Roberts
Invest NI Economist