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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
November 2015 Survey Update
Issued 14th December 2015
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 rebounds to a 3-month high with improvements in manufacturing & services
Composite PMIs for the US (Markit PMI not ISM), China, the Eurozone and the UK all improved in November
Developed Markets continue to outperform Emerging Markets
Emerging Markets PMI back above 50 but only just. India, which has escaped the slowdown thus far, wilts in November
Chinese Composite PMI back above 50 for the first time in 4 months
Australia’s services sector hits an 11-month low while manufacturing reaches a 25-month high
All economies bar France posted better composite PMIs in November relative to October
EZ manufacturing & services sector growth rates increase but retail sales & construction activity still contracting
The Eurozone composite PMI signals a loss of momentum in Q3 but some improvement in Q4
The Republic of Ireland, Spain, the US & UK posted the fastest rates of service sector output growth in November
Manufacturing activity picked-up in Japan & the EZ but the US ISM joined the Chinese PMI in contraction territory
Developed Markets continue to outperform Emerging Markets in terms of manufacturing
UK manufacturing output growth still ranks higher than most with RoI mid-table and NI struggling at the bottom
UK, NI and RoI firms all report a pick-up in their respective rates of business growth in November
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 first year in 7 years that business activity, new orders, employment & export orders all expanded
Output & new orders growth slow in Q4* relative to Q3 but export & employment growth accelerates
NI firms post a pick-up in the pace of job creation, new orders growth and business activity
RoI & NI firms report a slowdown in new orders growth (albeit RoI growth rate remains very strong). UK posts a pick-up
Backlogs of work continue to grow amongst RoI firms with levels of outstanding work for NI & UK firms falling
Export orders flat in November following a period of growth
RoI & NI firms report a pick-up in the rates of job creation with NI firms hiring at their fastest rate in 14 months
PMI signalled a slowdown in jobs growth in H2-14 but employment growth has accelerated since then
Inflationary pressures remain relatively subdued and output prices are falling again
Regional Comparisons
All UK regions bar Scotland post output growth in November
All UK regions bar Scotland posted growth in the 3 months to November with NI lagging behind the UK
The RoI reported the fastest rate of growth in business activity over the last 12 months & Scotland & NI the slowest
North East, Scotland & the North West post the weakest rates of job creation within the UK in November
Scotland and the North East 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
SectoralComparisons
UK services firms reported a pick-up in output growth but manufacturing & construction reported slower growth
The UK’s growth rate in Q3 moderated in line with the PMI to 0.5% q/q. A similar growth rate is expected in Q4
Output growth within manufacturing & services picks up in November while growth slows in construction sector
Retail & construction posted stronger rates of growth in H2* than H1 while services held steady & manufacturing slowed
NI manufacturing output slowing fast with services & construction in particular posting a pick-up in output growth
Jobs growth within the services & construction sectors accelerates while manufacturing industry is losing jobs
NI’s manufacturing firms have experienced a marked slowdown since mid-2015. Contraction in 2016?
RoI firms post a sharp slowdown in output growth with NI now signalling contraction. UK firms bucking the trend
NI firms report a marked divergence in manufacturing orders growth than their equivalents in the UK & RoI
All economies bar France & NI saw their PMIs improve in November. NI & Greece in contraction mode
Input cost inflation for manufacturers remains subdued with output price deflation accelerating
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 output, orders and employment growth in November
All three economies report a pick up in the rate of growth in services output in November
The rate of growth in NI’s services sector is 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 inflation remains relatively strong for services firms but a degree of pricing power remains
All three economies report an acceleration in the rate of employment growth in the three months to November
Pace of job creation within services sector eased in H2-14 but has picked up and accelerated throughout 2015
NI retailers report a significant moderation in sales growth with job creation easing too & orders falling
NI retailers report output price deflation with output prices recently falling at their fastest rate since June 2009
NI’s construction firms reporting rising rates of output, new orders & employment growth
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 but growth rate is slowing. NI firms catching up
New orders growth remains steady in the UK & RoI with NI firms reporting a marked acceleration in new orders growth
UK firms post robust rates of growth in housing & commercial activity with civil engineering lagging behind
UK sub-contractors remain in short-supply with rates charged still rising
Optimism amongst UK construction firms remains high
Construction activity linked to civil engineering & housing eases in November with commercial activity improving
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
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