Weak Northern economy set to drive shoppers south
Cross-border shopping patterns are set to switch from a south-north trend to a north-south one as the retail industry becomes the latest area to be squeezed by the contracting private sector economy in the North.
Ulster Bank’s latest Northern Ireland PMI (purchasing managers’ index), published yesterday, illustrates a tough start to 2015 for the North’s economy, with output, new orders and employment all falling.
Furthermore, the latest reduction in business activity, for January, the strongest seen since the end of 2012.
“Northern Ireland’s private sector has not had the best of starts for 2015. Local firms reported their first simultaneous decline in output, new orders and employment since May 2013.
“However, economic conditions are, perhaps, not as bad as this headline suggests, at least not for all sectors,” according to the Bank’s chief economist for Northern Ireland, Richard Ramsey, who also noted January’s welcome easing in inflation.
The services sector — the largest in the North — grew for the 19th straight month, but construction saw its first fall in output in 20 months to join retail and manufacturing as shrinking sectors.
According to Mr Ramsey, it is too early to know if the dip in construction is just a blip, but suggested the North’s retail sector is on a descending trajectory.
“Sterling is significantly stronger today than it was in the second half of 2012 and is currently at a seven-year high against the single currency.
“As a result, cross-border retail trade will be moving in the north-south direction, as opposed to south-north, which has been the dominant trade pattern for the last five or so years,” Mr Ramsey said.
Article Source: http://tinyurl.com/kbwqb42