The private sector in Northern Ireland is shrinking, but businesses are optimistic

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Even though the private sector's output in Northern Ireland continued to decline in January, there were glimmers of hope.

The Ulster Bank's regular business survey includes the information.

A trustworthy indicator of the state of the private sector economy is the monthly survey of about 200 businesses.

It suggests businesses are still hiring even though there has been a decline in new orders.

According to official data, Northern Ireland's recession started in the third quarter of 2022, and the Ulster Bank survey indicates that it has continued ever since.

A decline in manufacturing, construction, and service output was noted in the January survey.

Retail, however, saw growth following a protracted period of declining activity.

Richard Ramsey, chief economist at Ulster Bank, suggested that the second half of January's delivery of £600 in energy assistance for NI households may have boosted retail.

Additionally, he emphasized the Republic of Ireland's economy's comparatively strong performance, saying, "Unlike Northern Ireland and the UK, the Republic of Ireland is neither in nor flirting with recession, and cross-border shopping is providing some important support. ".

Even though output was still declining, Mr. Ramsey claimed that the rate of decline appeared to be slowing.

However, the rates of decline slowed in January. "Both business activity and incoming orders fell for their ninth consecutive month. ".

After 2022's "extreme pessimism," as described by Mr. Ramsey, some businesses also seem to be growing more optimistic about the year ahead.

Manufacturers and retailers had their most upbeat outlooks in almost a year, and only the construction industry anticipated further output declines in the coming year.

After the economy experienced zero growth between October and December, official data on Friday suggested that the UK as a whole narrowly avoided entering a recession in 2022.

This was in spite of a significant drop in economic output of 0.5% in December, which the Office for National Statistics said was partially caused by strike action.

Although the figures demonstrated "underlying resilience," Chancellor Jeremy Hunt added that "we are not out of the woods.".

The UK will still likely experience a recession this year, but the Bank of England believes it will be milder and shorter than previously predicted.

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