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Ulster Bank Northern Ireland Purchasing Managers Index (PMI)
Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector
April 2016 Survey Update
Issued 9th May 2016
Richard RamseyChief Economist Northern Ireland
Twitter @UB_Economics
PMI SurveysPurchasing Managers’ Indexes (PMIs) are monthly surveys of private sector companies which provide an advance indication of what is happening in the private sector economy by tracking variables such as output, new orders, employment and prices across different sectors.
Index numbers are calculated from the percentages of respondents reporting an improvement, no change or decline on the previous month. These indices vary from 0 to 100 with readings of 50.0 signalling no change on the previous month. Readings above 50.0 signal an increase or improvement; readings below 50.0 signal a decline or deterioration. The greater the divergence from 50.0 the greater the rate of change (expansion or contraction). The indices are seasonally adjusted to take into consideration expected variations for the time of year, such as summer shutdowns or holidays.
< 50.0 = Contraction 50.0 = No Change > 50.0 = Expansion
Data at a sector level are more volatile and 3-month moving averages have been used to more accurately identify the broad trends.
Global output growth improves in April due to services but manufacturing’s rate of expansion slows
China, Japan & the UK all report a notable deterioration in their PMIs in April with the US PMI improving
Developed Markets’ PMI improves in April but the equivalent survey for Emerging Markets stagnates
Emerging Markets’ PMI flat with Russia improving in April. India’s growth slows & Brazil’s recession continues
Chinese manufacturing and services PMIs both deteriorate in April
Diverging sector performance ‘Down Under’
France stagnant with Italy & Spain posting a pick-up in growth. Growth rate eases for UK, RoI & Germany
EZ manufacturing output growth eases with retail’s contraction accelerating but services growth continues
Following an easing in growth in H2-15, Eurozone GDP picked up in Q1-16 but composite PMI signals low gear
The Republic of Ireland and Northern Ireland continue to post the fastest rates of service sector output growth
Manufacturing PMIs for China, the US and Japan deteriorate in April with the Eurozone bucking the trend
Developed Markets still outperform Emerging Markets. The latter dips back below 50 for 12th time in 13 months
Denmark, Switzerland & Australia record the fastest rates of manufacturing output growth. BRICS still struggling
All economies report a slowdown in output growth
PMI suggests private sector growth stabilises in Q4-15, accelerates in Q1 2016 but eases in April
2014 was the 1st year in 7 years that the 4 main indicators recorded expansion, repeated in 2015 but growth slowed
Output & orders growth eases in Q2* relative to Q1 with exports & employment growth accelerating
NI firms reported an easing in new orders and output growth while rates of job creation accelerate
NI firms report a pick-up in new orders growth but still lagging behind the RoI. UK new orders growth eases
NI & RoI firms still reporting rising backlogs while their UK counterparts continue to post declines
NI export orders hit a 21-month high in April aided by sterling weakness & new business from the RoI
RoI jobs growth continues at a robust rate while NI and UK report similar rates of growth
Input cost and output price inflation accelerates
Regional Comparisons
The South West joins the North East in contraction territory with the East Midlands topping the league table
All UK regions bar Scotland & the North East posted growth in 3 months to April with NI top of the table
The RoI reported the fastest growth rate in business activity over the last year with Scotland the slowest
The North East, Yorkshire & Humberside and Scotland post job losses with NI’s rate of job creation above the UK average
Yorkshire & Humberside, Scotland & the North East report job losses in 3 months to April. NI above the UK average
Scotland and the North East posted the weakest rates of jobs growth over the last year with the RoI the strongest
SectoralComparisons
Growth remains subdued across all sectors
The UK’s growth rate slowed in Q1 to 0.4% and is expected to slow further in Q2 based on PMI
All sectors within the Republic of Ireland report an easing in their rates of growth in April
NI retailers & services firms posted a marked pick-up in business activity in Q1-16 with growth easing in Q2*
Services sector outperforms with robust output growth, construction slowing and manufacturing contracting
Rate of jobs growth eases within services & construction sectors while manufacturing job losses continue
NI’s manufacturing firms report a marked pick-up in orders with a pause in the recent series of job losses
NI manufacturing output contracts over the last 3 months with UK output slowing dramatically
NI firms report a return to orders growth with RoI and UK manufacturers reporting a marked slowdown
Manufacturing output contracts for NI and France in April with Greek output flat.
Higher wage costs (NLW introduced) are driving input costs higher with output price deflation continuing
Slowdown in global manufacturing is hitting employment levels most notably within the UK & NI
NI services sector experiences strong rates of growth in output and orders with rates of job creation easing
NI’s service sector output reports a marked acceleration in its growth rate with the UK equivalent slowing
The rate of growth in NI’s services sector accelerates to pre-downturn long-term average
NI firms report an easing in new orders growth after recent high with growth for RoI & UK firms
Input cost inflation picks up with output price rises continuing at a steady rate
NI & UK firms report an easing in the rate of service sector employment growth with RoI’s growth rate maintained
NI retailers continue to report strong demand in April after a strong Q1. Staffing levels rising at a rapid rate
NI retailers report a marked pick-up in input cost inflation while output prices continue to fall
NI’s construction firms still in expansion mode though rates of growth in output & employment are slowing
Input cost inflation accelerating with local firms enjoying a high degree of pricing power
Output growth for RoI firms eases from Q1 record high with a more significant slowdown for NI & UK firms
New orders growth decelerating markedly amongst NI & UK firms with orders growth still strong for RoI firms
UK firms report a slowdown in the rate of growth across all sectors but notably house building & commercial
UK sub-contractors remain in short-supply with rates charged still rising albeit at slower rates than in 2015
Optimism amongst UK construction firms has been falling and now below its long-term average
All aspects of RoI construction activity have reported a slowdown in their (still strong) growth rates
RoI’s construction industry still reporting a decrease in the availability of sub-contractors & rising rates of pay
RoI construction firms still remain very optimistic about the year ahead and well above the long-term average
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