Northern Ireland PMI Slide Pack November 2012

  • 323 views
Uploaded on

Slide pack for the Ulster Bank Northern Ireland PMI November 2012

Slide pack for the Ulster Bank Northern Ireland PMI November 2012

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
323
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
0
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Ulster Bank Northern IrelandPurchasing Managers Index (PMI) November 2012 Survey Update Issued 10th December 2012 Richard Ramsey Chief Economist Northern Ireland richard.ramsey@ulsterbankcm.com
  • 2. 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 = ExpansionData at a sector level are more volatile and 3‐month moving averages have been used to more accurately identify the broad trends.
  • 3. Global manufacturing output records positive growth forthe first time in 5 months Global Output - PMI 65 Source: Markit Economics Expansion 60 55 50 45 Contraction 40 35 30 Total Manufacturing Services 25 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 4. All sectors within the eurozone are still contracting Eurozone PMIs: Output 65 Source: Markit Economics Output Indices Expansion 60 55 50 Contraction 45 40 35 30 Whole Economy Manufacturing Services Construction 25 Nov-07 Sep-08 Jul-09 May-10 Mar-11 Jan-12 Nov-12
  • 5. Israel, France & Greece post steepest falls in manufacturingoutput. Denmark & Mexico post strongest gains PMIs: Manufacturing Output November 2012 Denmark Mexico Switzerland India Russia Brazil Ireland N.Zealand US Indonesia Vietnam China Turkey UK Austria Global NI, RoI & UK Canada Germany Poland Netherlands Singapore Czech EU Japan NI S.Korea Spain EZ South Africa Taiwan Australia Italy Greece Source: Markit Economics Output Indices France Israel 35 40 45 50 55 60 65
  • 6. Republic of Ireland & the UK still outperforming theirEuropean competitors in November Composite PMIs (Manufacturing & Services ** Excludes Construction**) 65 60 Expansion 55 50 Contraction 45 40 35 Source: Markit Economics PMIs 30 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 7. US remains the best performer relative to China, UK & EZ Composite PMIs (Manufacturing & Services ** Excludes Construction**) 65 Eurozone US (ISM) China UK 60 Expansion 55 50 Contraction 45 40 Source: Markit Economics 35 Mar-08 Nov-08 Jul-09 Mar-10 Nov-10 Jul-11 Mar-12 Nov-12
  • 8. … but US manufacturing is back below 50 mark Manufacturing PMIs 65 US (ISM) China Japan Eurozone 60 Expansion 55 50 Contraction 45 40 35 30 Source: Markit Economics 25 Mar-08 Nov-08 Jul-09 Mar-10 Nov-10 Jul-11 Mar-12 Nov-12
  • 9. UK just above expansion threshold whilst the rate ofcontraction remains steep for Northern Ireland Private Sector Business Activity - PMIs **PMI Surveys Exclude Agriculture & Public Sector** 65 NI UK RoI 60 Expansion 55 50 45 Contraction 40 35 Source: Markit & Ulster Bank NI PMI: 50 = threshold between expansion / contraction 30 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 10. PMI suggests further falls in private sector composite index (combinesDFP indices for construction, services and industrial production) in Q3 & Q4 2012 NI Private Sector Output Index Versus NI PMI PSO Q/Q% PMI UB PSO Left Hand Scale UB PMI Right Hand Scale 5 65 50 mark is the threshold for expansion / contraction with PMI 4 60 3 Expansion 2 55 1 50 0 45 -1 -2 40 -3 Contraction 35 -4 Source: Ulster Bank Private Sector Output (Index 2008 = 100) up to Q2 2012 & Markit Economics, *3 months to Nov-12 -5 30 2003 Q4 2005 Q2 2006 Q4 2008 Q2 2009 Q4 2011 Q2 2012 Q4*
  • 11. NI output, new orders and employment all contractingover the last 3 months NI Private Sector Activity 3 month moving average 70 Business Activity New Business Employment 65 Expansion 60 55 50 45 Contraction 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 12. Pace of contraction in NI new orders remains steep Private Sector New Orders 3 month moving average 65 Orders increasing NI UK RoI 60 55 50 45 Orders Contracting 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 13. NI’s levels of work outstanding still falling at a rapid rate Private Sector Backlogs 3 month moving average 60 NI UK RoI Increasing 55 50 45 Decreasing 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 14. Export orders have been falling since February 2008 NI New Export Business Monthly Growth Accelerating 65 New Export Orders No Change 60 55 50 45 Contraction Accelerating 40 35 30 25 Source: Markit Economics & Ulster Bank NI PMI 20 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 15. PMI underestimated job gains in Q2 (relative to official QuarterlyEmployment Survey – QES) further job losses signalled in Q3 & Q4 2012 PMI Index NI Employment: PMI (up to Nov-12) v QES* Q/Q 60 1.0% *QES is DFPs official Quarterly Employment Survey of the number of jobs in NI & includes the public sector 0.8% 55 0.5% Job gains 0.3% Discontinuity in QES Series 50 0.0% -0.3% 45 -0.5% Job losses -0.8% 40 -1.0% Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / -1.3% contraction,PMI 3mth averages 35 -1.5% Sep-03 Mar-05 Sep-06 Mar-08 Sep-09 Mar-11 Sep-12 PMI Employment Index No Change QES Q/Q
  • 16. Northern Ireland’s rate of decline in employment levelseases sharply in November Private Sector Employment Levels Monthly 60 NI UK RoI Job Gains 55 50 Job Losses 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 17. Input cost inflation accelerates with output pricesand charges still falling NI Private Sector Profit Squeeze 3 Month Moving Average 80 Output Prices Input Prices No Change Profits 70 squeeze Inflation 60 50 Deflation 40 Price of goods & Source: Markit Economics & Ulster Bank NI PMI services falling 30 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 18. RegionalComparisons
  • 19. 5 UK regions post a contraction in November withNorthern Ireland posting the steepest decline… Output / Business Activity PMI index November 2012 55 53.8 50 = No change Expansion 50.2 50 45 Contraction 41.6 40 Source: Markit Economics & Ulster Bank NI PMI 35 Wal NW Lon SE NE Y&H Scot UK EM SW East WM NI RoI
  • 20. NI posts sharpest rate of decline over the last 3 months… Output / Business Activity 3 months to November 2012 PMI Index 50 = No change 54 53.2 52 Expansion 50.4 50 48 46 Contraction 44 42 42.2 Source: Markit Economics & Ulster Bank NI PMI 40 Wal NW East Y&H Lon SE EM UK WM Scot NE SW NI RoI
  • 21. ……and over the last 12 months Output / Business Activity Last 12 months to November 2012PMI index 50 = No change55 Expansion 52.2 50.750 Contraction45 43.7 Source: Markit Economics & Ulster Bank NI PMI40 WM Lon Y&H EM SE UK East NW Scot Wal SW NE NI RoI
  • 22. After the North West, Northern Ireland posts thesteepest decline in employment over the last month … Employment Levels November 2012 PMI Index 54 50 = No change Increasing 51.8 52 50 49.4 48 47.9 Decreasing 46 44 Source: Markit Economics & Ulster Bank NI PMI 42 Y&H EM SE SW Scot East NE WM Wal UK Lon NI NW RoI
  • 23. …and steepest decline over the last 3 months… Employment Levels PMI index Last 3 months to November 2012 54 50 = No change Increasing 51.9 52 50 49 48 Decreasing 46 46.4 44 Source: Markit Economics & Ulster Bank NI PMI 42 EM WM Y&H Scot SE UK East Wal SW NW NE Lon NI RoI
  • 24. …and over the last 12 months Employment Levels Last 12 Months to November 2012PMI index56 50 = No change Increasing5452 50.650 49.9 Decreasing48 46.94644 Source: Markit Economics & Ulster Bank NI PMI42 EM WM Y&H SE Scot East UK SW NE NW Wal Lon NI RoI
  • 25. SectoralComparisons
  • 26. Manufacturing & Services output above the 50expansion threshold in November UK Business Activity / Output - PMIs70 Services Manufacturing Construction Expansion6050 Contraction4030 Source: Markit Economics20 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 27. UK composite PMI was more positive than official GDPdata (impacted by special factors) in 3 of the last 4 quarters UK GDP versus UK Composite PMI PMI Index GDP Q/Q 65 1.5 60 1 55 0.5 50 0 45 -0.5 40 -1 35 -1.5 30 -2 Source: ONS & Markit Economics ,*Q4 PMI refers to October & November 25 -2.5 2007 Q3 2008 Q2 2009 Q1 2009 Q4 2010 Q3 2011 Q2 2012 Q1 2012 Q4* GDP Q/Q PMI PMI No Change
  • 28. Services & manufacturing are above 50 in the RoI RoI Business Activity - PMIs 3 month moving average 65 Manufacturing Services Construction No Change Expansion 60 55 50 Contraction 45 40 35 30 25 Source: Markit Economics 20 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 29. All sectors in NI contracting…. NI Private Sector Output 3 month moving average65 Manufacturing Services Construction60 Expansion5550 Contraction454035 Source: Markit Economics & Ulster Bank NI30 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 30. … all NI sectors post employment declines over last 3months although manufacturing posts growth in November NI PMI - Employment Index 3 month moving average 65 Manufacturing Services Construction Job Gains 60 55 50 45 Job Losses 40 35 30 Source: Markit Economics & Ulster Bank NI PMI 25 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 31. Pace of decline in manufacturing eases with growthin employment and new orders in November NI Manufacturing Activity 3 month moving average65 Growth accelerating Business activity New Orders Employment605550 Contraction accelerating45403530 Source: Markit Economics & Ulster Bank NI PMI25 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 32. NI & UK manufacturing performance is convergingwhilst the RoI continues to outperform Manufacturing Output 3 month moving average 65 UK NI RoI No Change Expansion 60 55 50 45 Contraction 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-03 May-05 Nov-06 May-08 Nov-09 May-11 Nov-12
  • 33. …and new orders still falling in NI & the UK Manufacturing New Orders 3 month moving average 65 UK NI RoI No Change Expansion 60 55 50 45 Contraction 40 35 30 Source: Markit Economics & Ulster Bank NI PMI 25 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 34. N.Ireland lagging economies elsewhere Manufacturing Output - PMI 3 month moving average 70 Source: Markit Economics PMIs Expansion 60 50 Contraction 40 30 China Germany US NI UK 20 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 35. Ireland outperforming its euro zone partners Manufacturing Output - PMI 70 RoI Italy Spain Greece NI Expansion 60 50 40 Contraction 30 Source: Markit Economics PMIs, NI is 3 month moving average 20 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 36. Cost price inflation accelerating for local manufacturingfirms & pricing power still falling = profits squeeze NI Manufacturing Input & Output Inflation 3 month moving average No Change Input Costs Output Prices 80 Profits squeeze 70 Inflation 60 50 Deflation 40 Source: Markit Economics & Ulster Bank NI 30 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 37. PMI signals no major manufacturing job losses in Q3 andQ4 but FG Wilson announcement still to take effect PMI Index NI Manufacturing Employment: PMI (Nov-12) v QES* Q/Q 65 4% *QES is DFPs official Quarterly Employment Survey of the number of jobs in NI firms 3% 60 Discontinuity in QES Series Job gains 2% 55 1% 50 0% 45 -1% Job -2% 40 losses -3% 35 Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / -4% contraction,PMI 3mth averages 30 -5% Sep-03 Mar-05 Sep-06 Mar-08 Sep-09 Mar-11 Sep-12 PMI Employment Index No Change QES Q/Q
  • 38. RoI growth accelerates while NI-UK divergencewithin service sector remains… Services Output (excluding Retail) 3 month moving average70 UK NI RoI No Change65 Expansion605550 Contraction454035 Source: Markit Economics & Ulster Bank NI PMI30 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 39. …with significant gap in new orders remaining Services New Orders (excluding Retail ) 3 month moving average 70 UK NI RoI No Change Expansion 60 50 Contraction 40 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 40. …with employment levels still falling in NI & now UK Services Employment 3 month moving average 65 UK RoI NI No Change Expansion 60 55 50 45 Contraction 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 41. The PMI has signalled more job losses than the official datahave indicated so far. But PMI includes private sector only PMI Index NI Services Employment: PMI (up to Nov-12) v QES* Q/Q 65 1.5% *QES is DFPs official Quarterly Employment Survey of the number of jobs in NI and includes the public sector 60 1.0% Discontinuity in QES Series 55 0.5% Job gains 50 0.0% 45 -0.5% Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages Job losses 40 -1.0% Sep-03 Mar-05 Sep-06 Mar-08 Sep-09 Mar-11 Sep-12 PMI Employment Index No Change QES Q/Q
  • 42. Local retailers still reporting falling orders & activity Northern Ireland Retail PMI 3 monthly average 70 Business Activity New Orders Backlogs No Change 65 Expansion 60 55 50 Contraction 45 40 35 30 Source: Markit Economics & Ulster Bank NI PMI 25 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 43. Profits squeeze on local retailers intensifies NI Retail Input & Output Inflation 3 month moving average 90 Input Costs Output Prices No Change Profits 80 squeeze Inflation 70 60 50 Deflation 40 Source: Markit Economics & Ulster Bank NI 30 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 44. NI construction sector still in the midst of a severe downturn NI Construction PMI 3 month moving average Output New Orders Employment Expansion 60 50 = No change 50 Contraction 40 30 Source: Markit Economics, Ulster Bank PMI 20 Feb-09 Jul-09 Dec-09 May-10 Oct-10 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12
  • 45. …….with profits squeeze intensifying NI Construction Sector Profits Squeeze 3 month moving average PMI Index Input Prices Output Prices No Change 70 Inflation 60 50 Deflation 40 30 Source: Markit Economics & Ulster Bank PMI 20 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12
  • 46. NI PMI has been a reasonably good predictor of actualjob losses in the official employment surveys (QES) PMI Index NI Construction Employment: PMI (to Nov-12) v QES* Q/Q 65 5.0% *QES is NIs official Quarterly Employment Survey of the no. of jobs in NI firms 60 Job 2.5% 55 gains Discontinuity in QES Series 50 0.0% 45 -2.5% 40 35 -5.0% 30 Source: DFP, Ulster Bank & Markit Economics, PMI Job losses -7.5% 25 Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages 20 -10.0% Sep-03 Mar-05 Sep-06 Mar-08 Sep-09 Mar-11 Sep-12 PMI Employment Index No Change QES Q/Q
  • 47. Significant NI-UK divergence remains with output Construction Sector Output - PMI 3 month moving average PMI Index NI UK RoI Expansion 60 50 Contraction 40 30 Source: Markit Economics 20 Feb-09 Jul-09 Dec-09 May-10 Oct-10 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12
  • 48. … and with new orders falling in NI, UK & RoI Construction Sector New Orders - PMI 3 month moving average PMI Index NI UK RoI Expansion 60 50 Contraction 40 30 Source: Markit Economics 20 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12
  • 49. Growth opportunities for NI firms within GB will waneas activity eases but pick-up in civil engineering sector UK Construction Activity - PMIs 3 month moving average 70 Housing Activity Commercial Activity Civil Engineering Activity Expansion 60 50 40 Contraction 30 Source: Markit Economics 20 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12
  • 50. Lack of opportunities in the RoI with all constructionsub-sectors declining in November Republic of Ireland Construction Activity - PMI 3 month moving average 70 Housing Activity Commercial Activity Engineering Activity Expansion 60 50 = No change 50 40 Contraction 30 Source: Markit Economics & Ulster Bank 20 Mar-07 Aug-08 Jan-10 Jun-11 Nov-12
  • 51. DisclaimerThis document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and isnot intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service inany jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a position orengage 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 andare subject to change without notice. The information contained herein should not be construed as advice, and is not intended to beconstrued as such.This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained herewithout seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to theinformation and disclaim all liability for use the recipient or their advisors make of the information.Over-the-counter (OTC) derivates can involve a number of significant and complex risks which are dependent on the terms of the particulartransaction 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. Slide 51