NORTHERN IRISH business activity fell at its slowest pace in eight months in July, a new report suggests.

Commissioned by Ulster Bank, the survey utilises an indicator of business activity in the private sector called the Purchasing Managers’ Index (PMI).

In June 2012, the UK’s PMI plunged into contraction for the first time in more than three years, with eight regions including Northern Ireland falling shy of the 50 per cent mark, the threshold between growth and contraction.

“The health of the UK economy is the most important determinant of economic growth and prosperity within Northern Ireland,” said Richard Ramsey, Ulster Bank’s chief economist for Northern Ireland.

According to the same research, total levels of global manufacturing fell for the second successive month in July, a record low since May 2009.

Despite this, manufacturing output in Northern Ireland stopped falling in July for the first time in 2012 owing in part to volumes of new orders reaching a seven-month high.

Ulster Bank’s latest figures appear to paint a more optimistic picture of long-term growth in Northern Ireland’s private sector overall. However, Mr Ramsey suggested it may not be able to withstand the impact of the global manufacturing slump, which is gaining momentum.

Despite the gloomy figures for the UK’s private sector, the Republic’s PMI was one of the highest in the world last month.

Bryan Gray, chief executive of Manufacturing Northern Ireland, said this intense activity in the Republic, coupled with increased international exports by small and medium-sized enterprises, was helping to lift manufacturing output in the North. “We won’t be immune [to the global manufacturing downturn] but we have lots of examples of smaller companies that are successfully building on businesses overseas,” he said.