Embed Size (px)
Citation preview
Ulster Bank Northern Ireland Purchasing Managers Index (PMI)
Includes analysis of Global, Eurozone, UK, UK Regions, NI &
Republic of Ireland economic performance by sector
August 2015 Survey Update
Issued 14th September 2015
Richard Ramsey Chief Economist Northern Ireland
www.ulstereconomix.com
[email protected] Twitter @UB_Economics
PMI Surveys Purchasing 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 rate remains unchanged with services expanding but manufacturing output falls to a 28-month low
EZ manufacturing & services sector growth accelerates with retail sector’s growth easing & construction still contracting
The Eurozone’s composite PMI signals economic growth rate accelerating in Q3 2015
The UK & NI slip down the manufacturing output growth rankings with BRICS / Emerging markets not faring well
Australia, the Republic of Ireland & Spain posted the fastest rates of service sector output growth in August
Italy, Germany and Spain posted an acceleration in their respective growth rates in August
Composite PMIs for Japan & the Eurozone saw a pick-up in their growth rates in August
The US (ISM) & Chinese manufacturing PMIs posted the weakest growth rates in August
Chinese Composite PMI hits its lowest level since Feb-09
Alongside China, the PMIs for the Emerging Markets, Russia and Brazil are all signalling contraction
Australia’s services & manufacturing sectors signal a marked improvement in August, but will it last?
NI posts its 4th consecutive month of private sector growth but pace of growth eases & still lags behind the UK & RoI
PMI suggests growth in DFP’s private sector composite index during 2014 but recovery stalls in Q1-15 with a modest rebound in Q2 & Q3-15
2014 was the first year in 7 years that business activity, new orders, employment & export orders all expanded
NI Private Sector Performance (PMI)
30
35
40
45
50
55
60
2007 2008 2009 2010 2011 2012 2013 2014
PMI Index
Business Activity New Orders Employment Export Orders ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI
NI recovery took hold in H2-13, all indicators improved in H1-14 & eased in H2-14 with a further slowdown in H1-15
NI Private Sector Performance (PMI)
30
35
40
45
50
55
60
65
2006
H2
2007
H1
2007
H2
2008
H1
2008
H2
2009
H1
2009
H2
2010
H1
2010
H2
2011
H1
2011
H2
2012
H1
2012
H2
2013
H1
2013
H2
2014
H1
2014
H2
2015
H1
PMI Index
Business Activity New Orders Employment Export Orders
ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
NI firms report a pick-up in the pace of job creation but the growth rates for new orders & business activity slow
UK, RoI & NI firms continue to report growing order books but the pace of expansion has eased
Backlogs of work continue to grow amongst RoI & NI firms with levels of outstanding work amongst UK firms flat
Export orders are still struggling and not helped by the sterling / euro exchange rate
PMI signalled a slowdown in the pace of jobs growth in H2-14 but rebounds in H1-15
RoI firms maintain strong rates of jobs growth in August with NI reporting a marked pick-up in hiring
Inflationary pressures remain subdued and output prices are rising again
Regional Comparisons
All UK regions continue to post output growth in August
Most UK regions posted strong rates of growth in the last 3 months but rates of growth remain weak in Scotland & NI
The RoI reported the fastest rate of growth in business activity over the last 12 months & Scotland the slowest
The East of England & the RoI post the fastest rate of employment growth with Scotland & NI the slowest
NI & Scotland post the weakest rates of job creation within the UK over the last 3 months
Scotland, the North East & NI posted the weakest rates of jobs growth over the last year with the RoI the strongest
Sectoral Comparisons
All of the UK PMIs came in weaker than expected in August with services signalling a marked slowdown
The UK posts strong rates of growth throughout 2014 & more recently in Q2-15. PMI suggests growth will ease in Q3
RoI output growth across all sectors eases in August
All sectors in NI experienced weaker rates of growth in H2-14 relative to H1-14 with H1-15 even weaker
NI Private Sector Business Activity (PMI)
30
35
40
45
50
55
60
65
2006
H2
2007
H1
2007
H2
2008
H1
2008
H2
2009
H1
2009
H2
2010
H1
2010
H2
2011
H1
2011
H2
2012
H1
2012
H2
2013
H1
2013
H2
2014
H1
2014
H2
2015
H1
PMI Index
Manufacturing Services Construction Retail ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
NI manufacturing & services firms report an easing in output growth in Q3 but contraction within construction continues
Services & manufacturing firms are still increasing their staffing levels whilst construction employment is falling
NI’s manufacturing firms appear to be experiencing a slowdown across all broad indicators
RoI firms maintain strong rates of output growth but rates of growth ease for both RoI and NI firms
NI firms report a more marked slowdown in manufacturing orders growth than their equivalents in the UK & RoI
All economies bar Spain saw output growth slow or contract (France & Greece) in August
Input cost inflation for manufacturers remains subdued with output prices still falling
PMI signals moderation in jobs growth in H2-14 & Q1-15 following record high in Q2-14, rebound in Q2-15 eases in Q3
Service sector experiences a pick-up in orders & employment growth but output growth slows
NI firms fail to match the robust rates of growth in the UK & RoI service sectors but output growth is still accelerating
RoI & NI firms report a marked pick-up in new orders growth whilst expansion within UK order books slows
NI’s services firms report a marked pick-up in input cost inflation with some pricing power returning
NI services firms increased their staffing levels over the last 3 months but below the rates of growth in the UK & RoI
Pace of job creation within the services sector eased in H2-14 but has picked up in H1-15 & accelerated in Q3-15
NI retailers report a significant increase in sales and new orders
NI retailers report a return of pricing power with output prices rising. Input costs fall for the 1st time in the survey
NI’s construction firms report a decline in activity, new orders and employment over the last three months
Input cost inflation remains subdued as pricing power returns to local construction firms
NI’s construction PMI posts jobs growth Q3-13 to Q2-15 but this is largely due to NI firms working outside of NI
Very strong rates of output growth amongst RoI firms, robust growth with UK firms & contraction amongst NI firms
NI orders decrease over last 3 months with UK growth stabilising. RoI firms still reporting robust rates of growth
UK firms post a pick-up in civil engineering & commercial activity with housing activity easing
UK sub-contractors remain in short-supply with the rates that they charge still rising albeit a weaker rate
Optimism amongst UK construction firms remains high
RoI’s construction activity experiences a marked slowdown in August across all sectors
RoI’s construction industry still reporting a decrease in the availability of sub-contractors & rising rates of pay
RoI construction firms remain very optimistic about the year ahead
Slide 64
Disclaimer
This document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and is not intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service in any jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a position or engage in transactions in any of the instruments mentioned.
The information including any opinions expressed and the pricing given, is indicative, and constitute our judgement at time of publication and are subject to change without notice. The information contained herein should not be construed as advice, and is not intended to be construed as such.
This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained here without seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to the information and disclaim all liability for use the recipient or their advisors make of the information.
Over-the-counter (OTC) derivatives can involve a number of significant and complex risks which are dependent on the terms of the particular transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incur substantial costs if you wish to close out your position.
Calls may be recorded.
