Upload
richard-ramsey
View
330
Download
0
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
February 2017 Survey Update Issued 13th March 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 eases from January’s 22-mth high• US composite slips from 14-mth high • EZ composite PMI (56.0) at highest level since April 2011 • Russian composite PMI eases from January’s 8½-year high • Brazil (46.6) contracting but India (50.7) returns to growth • Global input price inflation eases from 67-mth high• Developed Market manufacturing PMIs slows from its 35-mth
high with Emerging Markets hitting a 31-mth high• UK output growth eases to a 5-month low due to services &
manufacturing slowdown • RoI business activity eases from its 10-mth high to 57.8• NI output growth slows (53.5) but construction growing again • NI manufacturing input cost inflation hits record high • NI retailers also raising prices at a record rate
February 2017 PMIs – Key highlights
Global output growth rate eases from January’s 22-month high but manufacturing output at a 3-year high
Eurozone activity expanding at its fastest rate in almost 6 years. US growth slips from its 14-mth high.
Developed Markets PMI slips from 14-month high while Emerging Markets rises to a 29-month high
Emerging Markets’ PMI hits a 29-month high as India returns to growth. Brazil has been contracting for 2yrs
Chinese services PMI continues to ease from its recent high while manufacturing rebounds in Feb-17
Divergent growth rates ‘Down Under’. Manufacturing output growth approaching a 7-yr high
Germany, France, Italy & Spain all report a marked acceleration in growth in February
All sectors of the Eurozone economy bar retail in expansion mode
GDP growth picked up in H2 after weak Q2. PMI signals even stronger growth in Q1-17
Ireland, Spain & Russia top the service sector growth league with Brazil at the bottom
All economies report an acceleration in manufacturing activity in February
Developed Markets manufacturing PMI eases from 35-month high as Emerging Markets hits a 31-month high
NI, UK & RoI firms report a slowdown in business activity in February though RoI’s growth rate remains strong
PMI suggests private sector growth rebounded in Q4 with a slight loss of momentum in Q1-17
2014 was the 1st year in 7 years that the 4 main indicators recorded expansion, repeated in 2015 & 2016
Output & export orders growth slow in Q1* but pace of job creation quickens. New orders growth maintained
NI firms report a slowdown in output growth but an acceleration in new orders & employment growth
RoI order books remain strong. UK orders growth slowing rapidly with a modest improvement for NI firms
RoI, UK & NI firms report rising backlogs but pace of growth for all countries has slowed
NI export orders continue to ease from their record high with £ weakness still cited as a factor boosting demand
RoI’s rate of jobs growth remains very strong with NI & UK firms reporting much weaker rates of growth
Inflationary pressures remain intense
Regional Comparisons
The West Midlands topped the regional growth table in January with Scotland at the foot of the league table
Scotland, London & the North East post the weakest growth rates of the UK regions over the last 3 months
The RoI reported the fastest growth rate in business activity over the last year with Scotland stagnating
Scotland & the East report the weakest rates of jobs growth with the West Midlands & Wales the strongest
NI posts the 4th slowest rate of employment growth of all UK regions over the last 3 months
The North East (job losses) was the only region not to post employment growth over the last 12 months
SectoralComparisons
UK manufacturing & services report a marked slowdown in output growth while construction output accelerates
The UK’s growth rate accelerated to 0.7% q/q in Q4 but PMI suggests Q1 will be weaker
Construction was the only sector in the RoI to report a pick-up in its rate of growth in February
NI retailers, services & construction firms posting faster rates of growth in Q1* relative to Q4
Construction’s period of contraction comes to an end with retailers enjoying robust rates of growth
All sectors of Northern Ireland’s private sector report an increase in staffing levels
NI’s manufacturing firms report an easing in the rate of output growth but a pick-up in orders & job creation
UK manufacturing output growth accelerates while growth moderates for RoI firms & eases for NI firms
NI manufacturing output growth (3-month average) remains in line with its pre-downturn long-term average
UK & RoI firms report robust rates of growth with NI firms also experiencing strong demand
NI & RoI manufacturing output growth eases with Greece contracting and Italy surging
NI manufacturing firms report record rates of input cost inflation with UK firms coming off record highs
Input cost inflation rockets to a record high (monthly) in Feb-17 with firms raising prices at a record rate too
NI & UK manufacturing firms report similar rates of growth in employment but well below those of the RoI
All key indicators across NI’s services sector signal an upward trend
NI & RoI services sector output accelerates (3 month average) with UK output growth slowing
The growth rate in NI’s services sector accelerates but remains below its pre-downturn long-term average
New orders growth up sharply for RoI firms with NI growth accelerating but still below UK & RoI
Profits squeeze within the services sector remains intense with input cost inflation remaining very high
NI & UK firms report similar rates of service sector jobs growth with RoI’s rate accelerating
NI retailers are still recruiting staff at a significant rate with sales & orders growth exceptionally strong
NI retailers increasing prices at a record rate as rising input costs get passed on to consumers
NI’s construction firms are hiring staff again as sustained period of contraction comes to an end
Input cost inflation accelerating at a rapid rate with firms passing on costs to customers where possible
NI firms report a rise in output for the first time in 11 months but still lags behind its UK & RoI counterparts
NI firms post first rise in orders in 11-months in February (but fall over 3 months) but still lags behind UK & RoI
UK civil engineering activity picking-up as housing activity slows and commercial activity stagnates
Slowdown in construction sector briefly led to a rise in supply of sub-contractors but that’s changed
Optimism amongst UK construction firms back below its long-term average
RoI housing & commercial activity remains strong while engineering output continues to fall
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
Slide 66
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.