Retail performance mixed as NI outdoes UK
There was good news and bad for Northern Ireland’s retail sector despite the region outperforming the rest of the UK in terms of economic activity increases.
According to the Purchasing Managers Index (PMI), the UK and US struggled with deteriorating global economic conditions last month.
The survey shows growth in business activity slowing to its weakest level in almost three years, with poor performance across all sectors.
Northern Ireland, however, fared comparatively better than almost every other UK region. Local firms reported a slight moderation in the pace of growth in output relative to January’s 16-month high.
However, unlike the UK, the rate of growth was still broadly in line with the long-term average that pre-dated the downturn. The slowdown in the rate of job creation was more marked but remained above the pre-downturn longer-term average.
Commenting on the findings Ulster Bank chief economist Richard Ramsey said: “Encouragingly, Northern Ireland’s private sector reported a pick-up in new orders growth, with new business rising in February at its fastest rate in eight months.
“It should be remembered however that whilst Northern Ireland is currently enjoying stronger rates of growth than the UK as a whole, this is from a lower base and is at least in part due to us playing catch-up.”
While the NI economy fared well, the local retail sector has struggled. The number of shoppers on high streets, in shopping centres, and retail parks fell by 5.1 per cent in February compared with the previous year.
The decline is significantly higher than the 1.1 per cent drop felt across the UK as a whole.
Aodhan Connolly, director of the Northern Ireland Retail Consortium, said a post-Christmas spending lull could explain the fall: “While retailers are trying to meet the challenges of what consumers want, the truth is, in Northern Ireland, we have less than half of the weekly disposable income than households in the rest of the UK.”
Deflation has also been an ongoing problem for the sector, with the PMI revealing selling prices increased in the service and construction sectors, but decreased in retail and manufacturing.
However, both retailers and construction firms posted slightly faster increases in employment than all other sectors since the beginning of 2016.
