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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 2017 Survey Update
Issued 16th May 2017
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 (53.7) just shy of January’s 13-mth high• Growth accelerates in UK, EZ & the Republic of Ireland• Chinese composite PMI slows to a 7-month low (51.2)• Emerging Markets Composite PMI eases from 31-mth high• Eurozone composite PMI (56.8) hits a 6-yr high • Italian & Spanish PMIs hit their highest levels since Jul-07 &
Aug-15 respectively• Developed Market manufacturing PMI just shy of recent 35-
mth high with Emerging Markets slipping back to 3-mth low• UK composite PMI (56.0) accelerates to a 4-mth high with
the West Midlands (60.3) the fastest growing region• RoI business activity accelerates to a 3-mth high (58.7)• NI firms’ output growth accelerates to 54.3 – its fastest rate of
growth this year
April 2017 PMIs – Key highlights
Global output growth rate remains unchanged for services but manufacturing eases to a 3-month low
Growth accelerates in the EZ, UK & US (marginally). While Japan & China post slower rates of growth in April
Developed Markets PMI growth rate quickens to 3-mth high & Emerging Markets eases to a 3-mth low
Emerging Markets’ growth rate eases due to China, India & Russia. Brazil expands for 1st time in 26 months
Chinese services PMI hits a 11-month low with manufacturing activity slowing to a 7-month low
Italy reports its fastest rate of growth since Jul-07 with strong rates of growth recorded elsewhere
Growth in EZ services, manufacturing & construction output at or close to 6-year highs
Early indications from the PMI suggests EZ may see an acceleration in Q2 economic growth
Ireland, Spain & France top the service sector growth league with Brazil back in expansion mode too
Euro-zone & Japanese manufacturing bucks the wider trend with activity accelerating in April
Developed Markets continue to outperform the Emerging Markets
NI & UK firms report faster rates of growth in April. NI firms reporting strongest rate of growth so far in 2017
PMI suggests private sector growth stalls in Q3, rebounds in Q4 with momentum retained into Q1/Q2
2014 was the 1st year in 7 years that the 4 main indicators recorded expansion, repeated in 2015 & 2016 (& Q1* 2017)
Output, export orders & employment growth rates quicken in Q2* (April) relative to Q1
NI firms report a pick-up in output & jobs growth while the rate of growth new orders remains unchanged
RoI firms’ orders growing at a robust rate with UK growth accelerating. NI orders growth remains at a 5-mth low
NI firms no longer report rising backlogs
NI export orders growth accelerates to a 3-month high
NI’s rate of employment growth exceeds the UK for 3rd
month in a row. Both NI & UK lag behind the RoI
Input and output cost inflation eases from their recent multi-year highs
Regional Comparisons
The West & East Midlands topped the regional growth table in April with Scotland & the North East at the bottom
Scotland, the North East & NI post the weakest growth rates of all the UK regions in the 3 months to April
The RoI reported the fastest growth rate in business activity over the last year with Scotland stagnating
NI reports the 6th fastest rate of job creation in the UK with the North East the only region not posting growth
NI private sector employment growth outperforming the UK average over the last 3 months
Scotland & the North East (job losses) have reported the weakest rates of jobs growth over the last year
SectoralComparisons
UK output growth rates accelerate for all sectors in April
PMI suggests that UK economic growth could rebound in Q2 following a disappointing Q1
All sectors within the RoI reported faster rates of growth in April
Unlike retail & construction, NI manufacturing & services post faster rates of growth in Q2*
Service sector growth accelerates with retail slowing. Construction recovering & manufacturing slowing
Construction, manufacturing & services firms report a pick-up in staffing levels in the 3 months to April
NI’s manufacturing firms report faster rates of growth in output, employment & new orders in the 3-mths to April
NI manufacturing output growth accelerates following its recent slowdown. UK & RoI output growth slows
NI manufacturing output growth below its pre-downturn long-term average after recent Q4 high
Rate of growth in NI & UK new orders accelerates while pace of expansion eases for RoI firms
French & Italian manufacturing output growth at a 6-year high with Greece still contracting
Sterling weakness exacerbating input cost inflation in NI & UK relative to elsewhere
Input cost inflation hits a record high in Q1 with firms also raising prices at a record rate. Some easing in April
NI & UK manufacturing firms report similar rates of growth in employment but well below those of the RoI
Output and new orders growth rates across NI’s services sector accelerates over the last 3 months
NI & UK’s services sector output growth accelerates in April but still lags behind the RoI
The growth rate in NI’s services sector remains relatively subdued & well below its pre-downturn long-term average
New orders growth rate plateaus for NI services firms and still lags well behind RoI and UK
Input cost inflation accelerates to a near 6-year high with output prices inflation more subdued
NI & UK firms report similar rates of service sector jobs growth but lagging well behind the RoI
NI retailers are still recruiting staff at a significant rate with sales and orders growth slowing rapidly
NI retailers report elevated rates of input cost inflation while output price inflation hits a record high in Q1
NI’s construction firms increasing their staffing levels but new orders are contracting again
Input cost inflation remains high with firms increasing prices at a much weaker rate
NI firms report their 2nd consecutive month of growth in March but stagnation in April
NI firms report falling orders whilst growth continues (albeit slowing) for UK & RoI firms
UK firms report increased activity for civil engineering & housing but commercial activity slows
Construction sector still reporting a shortage of sub-contractors
Optimism amongst UK construction firms is broadly in line with its long-term average
RoI housing and commercial construction activity has been improving while engineering output stagnates
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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