The rate of job creation in Northern Ireland has hit a 13-month high, according to the latest Ulster Bank Northern Ireland Purchasing Managers’ Index (PMI).

The data for May shows an increase in output and an acceleration in employment, while both input costs and output prices rose at slower rates than the previous month.

The Business Activity Index was 53.5 in May, down slightly from 54.3 in April but still pointing to a solid monthly rise in output, led by manufacturing.

Three of the four monitored sectors registered rises in output, with the exception being retail, where activity stagnated.

Higher activity was largely the result of new-order growth and a rise in export business aided by a weak sterling. The PMI shows that employment rose at its fastest since April 2016, and that confidence among companies improved in May, with anticipated rises in workloads leading to firms taking on extra staff and backlogs of work increasing for the first time in three months.

Ulster Bank chief economist Richard Ramsey (pictured) said the most encouraging indicator from the survey concerned employment: “Firms increased their staffing levels at their fastest rate in 13 months.

“The pick-up in the pace of job creation was due solely to the services industry, with all other sectors signalling a slowdown in employment growth.

“Service-sector firms increased their staffing levels in May at the fastest rate in 17 months. This followed a sustained period of subdued growth.”