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
December 2015 Survey Update
Issued 11th January 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 eases to a 12-month low with both services & manufacturing slowing in December
Composite PMIs for China & the US (Markit PMI not ISM) both posted notable declines in December
Developed Markets PMI slips to an 11-month low (53.8) but continues to outperform Emerging Markets (49.5)
Emerging Markets PMI back below 50 but only just. India, bucks the wider trend being followed by its fellow BRICS
Chinese Composite PMI back below 50 and at a 21-month low with slowdown spreading to services (17-mth low)
Australia’s services sector hits a 13-month low while manufacturing eases from its recent 25-month high
Italy posts its highest reading since February 2011 with France slipping to an 11-month low
EZ manufacturing & services continue to post output growth but retail & construction activity still contracting
The Eurozone composite PMI signals a loss of momentum in Q3 but some improvement in Q4
The Republic of Ireland, Germany, the UK & Italy posted the fastest rates of service sector output growth
Manufacturing activity picked-up in EZ, with Japan maintaining its growth rate. US & China still contracting
Developed Markets continue to outperform Emerging Markets in terms of manufacturing
UK & RoI manufacturing output growth still ranks higher than most with NI in the bottom half of the table
UK, NI and RoI firms all report an easing in their respective rates of business growth in December
PMI suggests growth in DFP’s private sector composite index during 2014 but recovery stalls in Q1-15 with a modest rebound in Q2 to Q4
2014 was the 1st year in 7 years that the 4 main indicators recorded expansion, repeated in 2015 but growth slowed
New orders growth slows in Q4 but output growth rate maintained with exports & jobs growth accelerating
NI firms reported an easing in the rate of output & jobs growth in December but a slight pick-up in orders growth
NI firms report a pick-up in new orders growth in December but still lag way behind the UK & RoI
Backlogs of work continue to grow amongst RoI firms with levels of outstanding work for NI & UK firms flat
Northern Ireland export orders rebound in December
RoI jobs growth continues but eases to a 23-month low. Employment growth for NI & UK eases slightly
PMI signalled a slowdown in jobs growth in H2-14 but employment growth has accelerated since then
Input cost inflation hit its highest rate for the year in December with output prices broadly flat
Regional Comparisons
All UK regions end 2015 in expansion mode but only just for Scotland
All UK regions posted growth in Q4 with Scotland’s growth rate marginal. NI still lagging behind the UK
The RoI reported the fastest rate of growth in business activity in 2015 with NI & Scotland the slowest
Scotland posts a fall in employment levels in December with NI’s rate of job creation broadly in line with the UK
Scotland and the North East post the weakest rates of job creation within the UK in Q4
Scotland, the North East & NI posted the weakest rates of jobs growth over the last year with the RoI the strongest
SectoralComparisons
UK construction industry was the only sector to post an acceleration in output growth in December
The UK’s growth rate in Q3 moderated in line with the PMI to 0.4% q/q. A slight improvement is expected in Q4
Manufacturing & construction output growth picks up in December while services activity slows from recent high
Retail & construction posted stronger rates of growth in H2 than H1 while services held steady & manufacturing slowed
NI manufacturing output flat, services output slowing but construction firms post a pick-up in output growth
Jobs growth within the services & construction sectors accelerates while manufacturing industry is losing jobs
NI’s manufacturing firms report a rebound in output & orders in December but pace of job losses accelerates
RoI & NI firms post a sharp slowdown in output growth in Q4 with UK firms recording a pick-up in activity
NI firms report a marked divergence in manufacturing orders growth than their equivalents in the UK & RoI
All economies saw an acceleration in output growth in December with Greece & NI back above 50
Higher wage costs are driving input costs higher with output price deflation continuing
NI manufacturing firms now reporting job losses at their fastest pace in 2½ years. UK & RoI are still creating jobs
NI PMI signals moderation in jobs growth in H2-14 & Q1-15 following record high in Q2-14. Job losses apparent in Q4
NI services sector experiences a pick-up in new orders & employment growth but output growth eases
NI diverges from the UK & RoI with firms reporting a slowdown in service sector output growth
The rate of growth in NI’s services sector slows and remains well below the pre-downturn long-term average
RoI firms still report very strong rates of new orders growth whilst growth amongst NI & UK firms lags behind
Input cost & output price inflation accelerate with output prices rising at their fastest rate since Sept-08
NI firms report a marked acceleration in jobs growth in Q4 which is now in line with the UK but well below RoI
Pace of job creation within services sector eased in H2-14 but has picked up and accelerated throughout 2015
NI retailers report a modest fall in sales and a notable decline in orders but pace of jobs growth accelerates
NI retailers report output price deflation with output prices recently falling at their fastest rate since June 2009
NI’s construction firms report rising rates of output, orders & employment growth but activity largely linked to GB
Input cost inflation remains subdued as local firms continue to enjoy pricing power
NI’s construction PMI posts jobs growth Q3-13 to Q4-15 with a dip in employment in Q3-15
UK & RoI firms reporting strong rates of output growth with NI firms catching up
New orders growth accelerating in the UK, RoI and NI
UK firms report a slowdown in the rate of growth in civil engineering & housing activity with commercial holding up
UK sub-contractors remain in short-supply with rates charged still rising albeit the pace of change is slowing
Optimism amongst UK construction firms remains high
All aspects of RoI construction activity have reported a pick-up in their growth rates in recent months
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
Slide 68
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 incursubstantial costs if you wish to close out your position.
Calls may be recorded.
