While the construction industry 'led' the way in a league of poorly performing NI businesses sectors, it has emerged that retail businesses have also performing been badly in the local economy this year.

A study undertaken on behalf of the Ulster Bank found that while the recession is hitting all businesses in Northern Ireland harder than anywhere else in the UK, these were the two local areas to be worst hit.

The Ulster Bank Purchasing Managers Index (PMI) showed that economic activity, new business and job numbers all fell sharply in March as the grip of recession on the province tightened.

And the report, published on Tuesday, showed that private sector activity in the province contracted at a faster rate than any other area of the UK during the first quarter of the year.

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All UK regions, with the exception of Northern Ireland and the South West (of England), saw an improvement in the business activity index in March.

"According to the PMI, private sector activity in Northern Ireland has contracted at a faster rate than any other UK region during the first quarter of 2009,” said Richard Ramsey, an economist at Ulster Bank.

"This is continuing the trend that was evident throughout 2008.

"Northern Ireland firms continued to reduce their staffing levels at a rapid rate in March.

"However, the pace of decline was more marked in the UK, albeit marginally, for the first time in 16 months.

"While all sectors of the economy reduced their respective headcounts in March, the rate of decline was most pronounced in the construction sector," he added, confirming that output from businesses in the province decreased for the sixteenth month in a row, with construction and retail the two worst-performing sectors.

Commenting to the Belfast Telegraph, Bryan Gray, from Northern Ireland Manufacturing, said while some sectors are holding up well, firms that make products related to the motor and construction industries are clearly hurting.

"It is disappointing that the local figures are down again when recent national figures showed an improvement," he said.

"It demonstrates that we have a long hard road ahead before we turn the corner."

(BMcC/KMcA)