Growth in the north’s private sector slowed during November, with firms reporting a reduction in new orders for the first time in 11 months.
The latest regional growth tracker from the lender said while output rose modestly, business confidence took a hit amid rising prices.
The monthly survey, which often signals early trends in the north’s economy, suggests output prices rose at the fastest pace for a year-and-a-half, which the report linked to increases in staff costs.
It followed last month’s Budget, where the Chancellor Rachel Reeves announced an increase in employers' national insurance contributions and further increase the national minimum wage.
Ulster Bank’s growth tracker is based on the feedback of 200 firms across the construction, services, manufacturing and retail sectors.
Sebastian Burnside, chief economist at the lender’s parent group NatWest, said: “Although output in Northern Ireland’s private sector continued to rise in November, the latest data brought the first signs that the recent spell of buoyant growth may be coming to an end.
“Output rose at the slowest pace since the opening month of the year as firms struggled to secure new orders.
“In fact, new business decreased in November, with the sharpest fall seen in the retail sector, a gloomy sign of muted underlying demand conditions heading into the all-important festive period.
“Last month we said that the November data would give us the first insight into the impact of the UK Budget on firms, and on an initial look the main effect has been to dampen business confidence, with overall sentiment the lowest in just over a year.”
The survey found while companies continued to hire additional staff, the rate of job creation slowed across the private sector.
Mr Burnside said the slowdown may reflect concerns in business circles over the impact hiring is having on costs, with firms mainly linking inflationary pressures to staff pay.
The November survey also suggests the rise in selling prices in Northern Ireland was the sharpest across the UK.
“With the private sector’s performance losing some of its shine in November, the coming months will be key in determining whether we are seeing a temporary soft-patch or the start of a more worrying downturn,” added the economist.
