Northern Ireland’s economy will do well to “avoid stagnation” in 2017 against a backdrop of political challenges at home and abroad, the chief economist of one of the North’s main banks has warned.
Ulster Bank's Richard Ramsey says that although the North's economy may have significant momentum behind it – thanks largely to the tailwinds from a strong retail sector – it is facing inflationary pressures and benefit freezes which will act as "speed bumps" for consumer spending in the months to come.
The bank’s latest Purchasing Managers Index (PMI) survey, published on Monday, shows that Northern Ireland firms enjoyed their strongest rate of growth in almost two and a half years last month.
The survey shows businesses reporting buoyant order books going into 2017, with some at their highest level in two years. Overall, Northern Ireland companies enjoyed their best export performance for more than 12 years in 2016, thanks in part to the knock-on effect of the Brexit vote on sterling.
Mr Ramsey said the latest PMI survey showed that Northern Ireland had also experienced its strongest set of quarterly retail sales figures in the survey’s 14-year history.
“Demand from the Republic of Ireland is boosting exports and retail sales considerably. As a result, Northern Ireland’s retail sector continues to post the fastest rates of job creation of all the sectors,” he said.
Separately, new figures, also released on Monday by the Northern Ireland Retail Consortium (NIRC), showed that that shopper footfall grew by 4.6 per cent year-on-year last month across the North, which was the highest growth reported in the UK.
It was the second consecutive month during which Northern Ireland enjoyed the best levels of footfall growth in the UK.
But Aodhán Connolly, director of the NIRC, has warned that the latest political crisis in the North has cast a shadow over the positive results.
The retail body is warning that neither industry nor Northern Ireland consumers can afford continued political instability and it is especially worried that the North currently has no programme for government or a budget in place.
