The private sector in Northern Ireland continued to see a decline in output during the month of January, but there were some signals of cautious optimism.
The information can be found in Ulster Bank’s quarterly survey of local businesses.
Most people agree that the monthly survey of about 200 businesses is a reliable way to see how the private sector economy is doing.
It appears that businesses have seen a decrease in new orders but are carrying on with their hiring efforts.
There was an economic downturn in Northern Ireland beginning in the third quarter of 2022, according to official data, and this trend has continued, according to a study conducted by Ulster Bank.
The poll conducted in January found that output in manufacturing, construction and services all decreased.
Despite this, there was an increase in retail activity after a prolonged period of declining activity.
According to the chief economist of Ulster Bank, Richard Ramsey, the distribution of £600 in energy support to homes in Northern Ireland during the second part of January may have helped boost retail.
Besides this, he talked about how well the economy of the Republic of Ireland was doing. He said, “Unlike Northern Ireland and the United Kingdoms, the Republic of Ireland is neither in recession nor flirting with it, and shopping across borders is helping in important ways.”
According to Mr Ramsey, the rate of loss in production appears to have slowed down even though it is still decreasing overall.
“Business activity and incoming orders declined for their ninth consecutive month in January, despite the fact that the rates of fall slowed from December to January.”
After what Mr Ramsey referred to as the “severe pessimism” that was exhibited in 2022, it would indicate that some firms are beginning to feel more optimistic about the year to come.
The construction industry was the only one that anticipated additional drops in output in the following 12 months, while manufacturers and merchants experienced their highest level of optimism in almost a year.
On Friday, official estimates revealed that the UK as a whole narrowly avoided going into recession in 2022 after the economy had zero growth between October and December. This was the case despite the fact that the GDP had grown between October and December.
This was the case even though GDP fell by a sharp 0.5% in December, as reported by the Office for National Statistics. As a result of strike activity, primarily.
However, Chancellor Jeremy Hunt cautioned that “we are not out of the woods” despite the fact that the numbers demonstrated “underlying resilience.”
The Bank of England anticipates that the United Kingdom will go into recession this year; however, it now believes that the recession will be milder and shorter than it had anticipated.