Business activity in the Northern Ireland private sector fell sharply at the end of 2024, a new survey suggests.
The December economic growth tracker from Ulster Bank registered the first reduction in business activity for more than a year.
The NatWest-owned lender said the reduction in output was the result of a further fall in new orders last month, with firms generally blaming waning customer demand.
Based on the feedback of 200 firms across the north’s construction, services, manufacturing and retail sectors, the monthly purchasing managers’ index (PMI), is often considered an early bellwether for how the economy is performing.
The PMI had ranked the north as one of the UK’s strongest performing regions throughout much of 2024.
But the December report placed Northern Ireland as one of the weakest of 12 UK regions assessed.
The survey suggests the north’s services and manufacturing sectors remained in growth mode last month.
However, the pace of output for the all-important services sector fell sharply.
The performance of the retail and construction sectors ultimately pulled the headline business activity index down to 47.7 for December.
Anything below 50 is considered a contraction.
Ulster Bank said while its survey suggests Northern Ireland firms continued to increase employment, the fall in business activity was the most pronounced since October 2023.
Sebastian Burnside, the chief economist at Ulster Bank’s parent company NatWest, said: “The Northern Ireland private sector ended 2024 on a softer note, recording the first reduction in business activity for more than a year on the back of a further decline in new orders.
“This represented a marked turnaround in fortunes for local firms as rapid growth was recorded through much of 2024, even through to as late as October, when Northern Ireland was the strongest performer across the UK.
“The labour market remained positive with employment continuing to increase despite the reductions in output and new orders.
“In fact, Northern Ireland was the only part of the UK to see a rise in staffing levels.”
In terms of forward looking outlook, business sentiment in the north recovered slightly from November’s 13-month low amid hopes that demand would show signs of improvement in the new year.
But confidence remained much weaker than the average for the year as a whole.
The survey suggests business concerns were tied to the UK Government’s Autumn Statement and concerns over NI Water’s budget and associated development constraints.
Official government statistics on the performance of Northern Ireland’s economy during the third quarter of 2024 are due to be published on Thursday.
