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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
January 2017 Survey Update Issued 13th February 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 hits a 22-mth high• US composite PMI hits a 14-mth & China slips to a 4-mth low• EZ composite PMI (54.4) remains at highest level in >5½ yrs • Russian composite PMI hits an 8½-year high • Brazil (44.7) & India (49.4) composite PMIs signal contraction• Global input price inflation hits a 67-mth high• Developed Market manufacturing PMIs hits a 35-mth high
with Emerging Markets easing from a 29-mth highs• UK output growth eases due to services & construction • RoI business activity accelerates to a 10-mth high (59.3)• NI business activity eases to 54.2 from 58.7• NI & UK manufacturing input cost inflation hits record high • NI retailers also raising prices at a record rate
January 2017 PMIs – Key highlights
Global output growth rate accelerates to a 22-month high
US outperforms in January with composite hitting a 14-month high. China slips to a 4-month low
Developed Markets PMI hits a 14-month high while Emerging Markets rises to a 23-month high
Emerging Markets’ PMI remains in growth mode but divergence between Russia (8.5yr high) & India & Brazil
Chinese services & manufacturing PMIs ease from their recent highs
Strong growth ‘Down Under’ eases in January
Ireland & France report a marked acceleration in growth with the other economies posting a slowdown
All sectors of the Eurozone economy in expansion mode but retail only just!
GDP remained stuck in a low gear in Q2 & Q3 but PMI signals more momentum in Q4/Q1-17
Ireland, Russia & Australia top the service sector growth league with India & Brazil at the bottom
A pick-up in manufacturing activity is evident in the US, Japan & the Eurozone. Slowdown in China
Developed Markets manufacturing PMIs hits a 35-month high & diverging from Emerging Markets
NI & UK firms report a slowdown in private sector growth in January with RoI firms signalling a pick-up
PMI suggests private sector growth rebounded in Q4
2014 was the 1st year in 7 years that the 4 main indicators recorded expansion, repeated in 2015 & 2016
Output & orders rebound in Q4 but pace of job creation eases. Sterling weakness triggers surge in exports
NI firms report a slowdown in output, new orders & employment growth
RoI firms report a marked pick-up in new orders with NI & UK firms posting faster rates of growth too
RoI, UK & NI firms report rising backlogs
NI export orders ease from their record high with £ weakness still cited as a factor behind strong demand
RoI jobs growth accelerates with NI & UK firms reporting a slowdown in employment growth
Input cost inflation in Q4 hits its highest level since Q2-11. Output prices rise at their fastest rate since Q3-08
Regional Comparisons
The West Midlands topped the regional growth table in January with Scotland at the foot of the league table
Scotland, the North East & London 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 North East report the weakest rates of jobs growth with Wales & the North West the strongest
NI posts the 3rd 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 manufacturers report a pick-up in output growth while construction & services signal a slowdown
The UK’s growth rate has remained constant at 0.6% q/q for the last 3 quarters firmer than PMI suggested
Construction was the only sector in the RoI to report a slowdown in the rate of growth in January
NI retailers, services & manufacturing firms in growth mode while construction remains broadly flat
Retail surging & construction contracting. Manufacturing & services continue to expand at robust rates of growth
Retail sector eases from a record high (67.8) with private sector (excl. retail) easing from December’s 26-mth high
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 growth across key indicators over the last 3 months
UK & RoI manufacturing output growth accelerates while growth moderates for NI firms
NI manufacturing output growth (3-month average) remains above its pre-downturn long-term average
UK firms report robust rates of growth with NI and RoI firms signalling a marked pick-up in demand too
NI manufacturing output growth eases with Greece contracting at its fastest rate in 16-months
NI & UK manufacturing firms reporting record rates of input cost inflation
Input cost inflation rockets from end of Q1-16 with firms raising prices at a record rate
NI’s manufacturing firms reporting a slowdown in jobs growth following a ‘V-shaped recovery’
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 unchanged
The growth rate in NI’s services sector accelerates but remains below its pre-downturn long-term average
New orders growth up sharply for UK & RoI firms with NI more muted.
Input cost inflation accelerates with output prices increasing at a much weaker rate
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 eases
Input cost inflation accelerating at a rapid rate with firms increasing prices at a much weaker rate
NI firms report a decline in output over the last 3 months in contrast to growth amongst UK & RoI firms
NI firms continue to post a slump in new orders growth in contrast to robust growth amongst RoI & UK firms
UK firms report an improvement in conditions across housing, commercial & civil engineering activity
Slowdown in construction sector briefly led to an increase in supply of sub-contractors
Optimism amongst UK construction firms back above 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
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