Ulster Bank survey says private sector activity in NI fell once again

Activity in Northern Ireland's private sector fell again in December.

It was at a softer rate than earlier in the year, according to a survey by Ulster Bank.

Every month, the bank asks firms in the private sector about staffing levels, order books and exports in what is considered to be a reliable indicator of economic performance.

All four sectors of the economy reported falls in output and employment levels in December.

Services - the largest sector of the economy in Northern Ireland - reported the fastest decline, in contrast to previous recessions when it was traditionally the least affected sector.

Ulster Bank chief economist Richard Ramsey said: "Northern Ireland's private sector ended 2020 the way it began the year with business activity contracting at the same pace in December as in January."

The survey showed the local economy experienced six months of contraction in the first half of 2020, including record rates of decline in the second quarter.

While things picked up in the third quarter, Mr Ramsey said recovery was short-lived and faltered as renewed lockdown restrictions triggered three months of contraction in the final quarter of the year.

Despite this, the survey suggested companies remain optimistic about the year ahead, with business sentiment at its highest level since February.

"The arrival of a number of vaccines has already provided a general boost to business confidence," Mr Ramsay said.

"Furthermore, the recent UK-EU trade deal (secured after this survey was conducted) has taken the risk and uncertainty of a 'no-deal' Brexit off the table.

"This will act as an additional boost to confidence for 2021. In the meantime, however, we can expect teething problems to emerge as firms on both sides of the Irish Sea get to grips with the new trading arrangements.

"Even when these are mastered the reality is that trade will be more restricted, involve more bureaucracy, and therefore be more costly than before."