Your SlideShare is downloading. ×
Ulster Bank Northern Ireland Purchasing Managers Index (PMI) - November 2013
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Ulster Bank Northern Ireland Purchasing Managers Index (PMI) - November 2013

214

Published on

Slide pack re the Ulster Bank Northern Ireland Purchasing Managers Index (PMI), November 2013. Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by …

Slide pack re the Ulster Bank Northern Ireland Purchasing Managers Index (PMI), November 2013. Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector

Published in: Technology, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
214
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
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 Ireland  Purchasing Managers Index (PMI) Includes analysis of Global, Eurozone, UK, UK Regions, NI &  Republic of Ireland economic performance by sector November 2013 Survey Update  Issued 9th December 2013 Richard Ramsey Chief Economist Northern Ireland richard.ramsey@ulsterbankcm.com Twitter @UB_Economics
  • 2. PMI Surveys Purchasing 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.
  • 3. Global output growth accelerates in November due to both the services & manufacturing sectors Global Output - PMI 65 Source: Markit Economics Expansion 60 55 50 Contraction 45 40 35 30 Total 25 Jun-07 May-08 Apr-09 Manufacturing Mar-10 Feb-11 Services Jan-12 Dec-12 Nov-13
  • 4. … but the Eurozone experiences a slowdown in November due to its services sector Eurozone PMIs: Output 65 Expansion Source: Markit Economics Output Indices 60 55 50 Contraction 45 40 35 30 Composite (M&S) Manufacturing Services Construction 25 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13
  • 5. Top performers within manufacturing include Denmark, US, UK & NI. Underperformers include Australia, France & Spain PMIs: Manufacturing Output November 2013 Denmark US UK NI Japan Czech Republic Netherlands Switzerland N.Zealand* Canada Austria Poland Turkey Global Taiwan Germany EU S.Africa Ireland Italy EZ China Vietnam Mexico India Israel* Singapore Russia Brazil Greece S.Korea Indonesia Spain France Australia 35 NI, UK & RoI € Source: Markit Economics Output Indices, *Sep, for the US ISM is used. 40 45 50 55 60 65 70
  • 6. N.Ireland, the UK & the Republic of Ireland post the fastest rates of service sector output growth in November PMIs: Services Output November 2013 NI UK Ireland Germany US* Global EU China Brazil Emerging Markets Japan Russia Spain EZ Australia France Italy India € Source: Markit Economics Output Indices, * US Non-manufacturing which is wider than services 35 40 45 50 55 60 65
  • 7. The 2nd & 3rd largest economies within the eurozone are contracting again with the UK & RoI still outperforming Composite PMIs 65 (Manufacturing & Services ** Excludes Construction**) Expansion 60 55 50 Contraction 45 40 35 Source: Markit Economics PMIs 30 Mar-07 Jan-08 Nov-08 Sep-09 Jul-10 May-11 Mar-12 Jan-13 Nov-13
  • 8. The UK, US & EZ saw their composite PMIs slip in November while China’s moved higher Composite PMIs (Manufacturing & Services ** Excludes Construction**) 65 Eurozone US (ISM) China UK Expansion 60 55 50 Contraction 45 40 Source: Markit Economics PMIs, US includes construction 35 May-08 Apr-09 Mar-10 Feb-11 Jan-12 Dec-12 Nov-13
  • 9. The US, Japan & the Eurozone all posted an acceleration in manufacturing activity in November Manufacturing PMIs 65 US (ISM) China Japan Eurozone No Change 60 Expansion 55 50 Contraction 45 40 35 30 Source: Markit Economics 25 May-08 Apr-09 Mar-10 Feb-11 Jan-12 Dec-12 Nov-13
  • 10. PMIs for Russia & Brazil slipped in November but growth in Emerging Markets accelerates overall Composite PMIs (Manufacturing & Services Brazil Russia India ** Excludes Construction**) Emerging Markets No Change 65 Expansion 60 55 50 Contraction 45 40 35 Source: Markit Economics 30 Jun-07 May-08 Apr-09 Mar-10 Feb-11 Jan-12 Dec-12 Nov-13
  • 11. Australia’s manufacturing sector joins its services sector in contraction territory in November Australia - PMI 65 Manufacturing Services No Change 60 Expansion 55 50 Contraction 45 40 35 Source: Markit Economics PMIs 30 Mar-07 Jan-08 Nov-08 Sep-09 Jul-10 May-11 Mar-12 Jan-13 Nov-13
  • 12. UK & the RoI see growth rates ease in November while NI posts its fastest rate of growth since March 2004 Private Sector Business Activity - PMIs **PMI Surveys Exclude Agriculture & Public Sector** 65 NI UK RoI Expansion 60 55 50 45 Contraction 40 35 Source: Markit & Ulster Bank NI PMI 50 = threshold between expansion / contraction 30 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 13. PMI suggests growth in DFP’s new private sector composite index (combines indices for construction, services, agriculture & industrial production) in Q3 & Q4 NI Private Sector Output Index Versus NI PMI PSO Q/Q% 5 4 NICEI Left Hand Scale PMI Right Hand Scale 50 mark is the threshold for expansion / contraction with PMI Expansion 3 2 PMI 65 60 55 1 0 50 -1 45 -2 Contraction -3 -4 -5 -6 Source: New DFP Northern Ireland Composite Economic Index (NICEI) & Ulster Bank / Markit Economics NI PMI, * for PMI refers to average for October & November 40 35 30 2003 Q2 2004 Q4 2006 Q2 2007 Q4 2009 Q2 2010 Q4 2012 Q2 2013 Q4*
  • 14. NI firms report an acceleration in business activity & new orders growth but pace of job creation slows NI Private Sector Activity Monthly 70 Business Activity New Business Employment Expansion 65 60 55 50 Contraction 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 15. Buoyant order books suggest more growth in the months ahead. NI posts its fastest rate of growth since July 2004 Private Sector New Orders Monthly NI UK Orders increasing 65 RoI 60 55 50 Orders Contracting 45 40 35 Source: Markit Economics & Ulster Bank NI 30 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 16. Surge in demand is leading to backlogs of work with NI index posting a record high in November Private Sector Backlogs 3 month moving average 60 UK RoI Increasing NI 55 50 Decreasing 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-03 Jul-05 Mar-07 Nov-08 Jul-10 Mar-12 Nov-13
  • 17. NI firms post their 5th successive increase in export orders in November NI New Export Business 70 No Change 60 Expansion New Export Orders 50 Contraction 40 30 Source: Markit Economics & Ulster Bank NI PMI 20 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 18. PMI underestimated QES job gains in 2012. PMI for Q3 signals fastest rate of jobs growth since Q4 2007 with even stronger growth in Q4 PMI Index NI Employment: PMI v QES** Q/Q 60 1.0% **QES is DFP's official Quarterly Employment Survey of the number of jobs in NI & includes public sector Job gains 55 0.8% 0.5% 0.3% Discontinuity in QES Series 50 0.0% -0.3% 45 -0.5% Job losses 40 Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to average for October & November -1.0% -1.3% 35 2003 Q4 -0.8% -1.5% 2005 Q4 2007 Q4 PMI Employment Index 2009 Q4 No Change 2011 Q4 QES Q/Q 2013 Q4*
  • 19. UK, RoI & NI firms all experienced jobs growth in November albeit at a weaker rate than October Private Sector Employment Levels Monthly 60 UK RoI Job Gains NI 55 50 Job Losses 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  • 20. Private sector’s profitability squeeze remains but pricing power is on the rise NI Private Sector Profit Squeeze 3 Month Moving Average Output Prices Input Prices No Change 80 Profits squeeze 70 Inflation 60 50 30 Price of goods & services rising Source: Markit Economics & Ulster Bank NI PMI Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13 Deflation 40
  • 21. Regional Comparisons
  • 22. PMIs Indian summer continues with strong growth everywhere & NI moving up the PMI league table… Output / Business Activity November 2013 PMI Index 70 50 = No change 65 60.5 60.2 55.6 55 Expansion 60 50 Contraction 45 Source: Markit Economics & Ulster Bank NI PMI 40 SE EM Lon SW UK NI NW East WM NE Wal Y&H Scot RoI
  • 23. …all the UK regions post growth over the last 3 months Output / Business Activity 3 months to November 2013 PMI Index 50 = No change 70 65 60.8 58.8 56.7 55 Contraction 50 45 Source: Markit Economics & Ulster Bank NI PMI 40 Lon EM SE SW NW UK East NI WM Y&H Wal Scot NE Expansion 60 RoI
  • 24. … and over the last 12 months Output / Business Activity 12 months to November 2013 PMI Index 50 = No change 60 55.7 53.8 52.5 Contraction 50 Source: Markit Economics & Ulster Bank NI PMI 45 Lon SE NW Wal Y&H EM UK SW East Scot WM Expansion 55 NI NE RoI
  • 25. All the UK regions and the Republic of Ireland post employment growth in November … Employment Levels November 2013 PMI Index 50 = No change 60 58 55.5 56 54.8 52 Increasing 54 51.2 Decreasing 50 48 Source: Markit Economics & Ulster Bank NI PMI 46 Lon SW WM East SE UK NW Scot EM Wal NE NI Y&H RoI
  • 26. … and over the last 3 months to November Employment Levels 3 months to November 2013 PMI Index 58 50 = No change 56 55.3 54.7 Increasing 54 51.9 52 Decreasing 50 48 46 Source: Markit Economics & Ulster Bank NI PMI 44 Lon WM SW SE UK NW East Wal Scot NI EM Y&H NE RoI
  • 27. NI posts a marginal decline in employment with the West Midlands & RoI the sharpest rise over the last 12 months Employment Levels PMI Index 12 months to November 2013 50 = No change 54 53.2 Increasing 52.1 52 50 49.9 Decreasing 48 Source: Markit Economics & Ulster Bank NI PMI 46 WM SE East Lon SW UK Scot Wal NW EM Y&H NE NI RoI
  • 28. Sectoral Comparisons
  • 29. All 3 UK sectors maintain strong rates of growth in November with services still close to its 16-year high UK Business Activity / Output - PMIs 70 Services Manufacturing Construction Expansion 60 50 Contraction 40 30 Source: Markit Economics 20 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 30. UK economic growth accelerates in Q2, Q3 & Q4 PMI Index UK GDP versus UK Composite PMI UK Composite includes Construction GDP Q/Q 65 1.5 60 1 55 0.5 50 0 45 -0.5 40 -1 35 -1.5 Source: ONS & Markit Economics, * refers to October & November average 30 25 -2 -2.5 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4* GDP Q/Q PMI PMI No Change
  • 31. The RoI’s manufacturing & service sectors experience a slowdown in their growth rates in November RoI Business Activity - PMIs Monthly 65 Services Construction No Change 60 55 Expansion Manufacturing 50 Contraction 45 40 35 30 25 Source: Markit Economics 20 Jun-07 May-08 Apr-09 Mar-10 Feb-11 Jan-12 Dec-12 Nov-13
  • 32. All 3 broad sectors within NI saw their rates of growth in output accelerate over the last 3 months Northern Ireland Private Sector Output 3 month moving average 65 Manufacturing Services Construction Expansion 60 55 50 Contraction 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 33. …with all sectors also reporting job gains over the last 3 months NI PMI - Employment Index 3 month moving average 65 Manufacturing Services Construction Job Gains 60 55 50 Job Losses 45 40 35 30 Source: Markit Economics & Ulster Bank NI PMI 25 Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  • 34. NI’s manufacturing sector posts an acceleration in orders, employment & output growth over the last 3 months NI Manufacturing Activity 3 month moving average Business activity New Orders Employment 60 55 50 40 35 30 Source: Markit Economics & Ulster Bank NI Contraction accelerating 45 Growth accelerating 65 25 Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  • 35. UK & NI manufacturing firms signal very strong rates of growth in output during the last 3 months 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 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 36. The UK posts the strongest rate of growth in new orders Manufacturing New Orders 3 month moving average 65 UK NI RoI No Change Expansion 60 55 50 Contraction 45 40 35 30 Source: Markit Economics & Ulster Bank NI PMI 25 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 37. N.Ireland is outperforming its European competitors Manufacturing Output - PMI 70 RoI Italy Spain Greece NI Expansion 60 50 Contraction 40 30 Source: Markit Economics PMIs 20 Mar-07 Jan-08 Nov-08 Sep-09 Jul-10 May-11 Mar-12 Jan-13 Nov-13
  • 38. Cost price inflation remains for local manufacturing firms but pricing power is improving due to increased demand NI Manufacturing Input & Output Inflation 3 month moving average No Change Input Costs Output Prices 80 Profits squeeze 70 Inflation 60 50 Deflation 40 30 Source: Markit Economics & Ulster Bank NI PMI Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  • 39. PMI underestimated manufacturing job surge in Q2. But PMI suggests further job gains in Q3 & Q4 2013 PMI Index 65 NI Manufacturing Employment: PMI v QES** Q/Q 4% **QES is DFP's official Quarterly Employment Survey of the number of jobs in NI firms 60 Job gains Discontinuity in QES Series 3% 2% 55 1% 50 0% 45 -1% Job losses 40 35 -3% Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to average for October & November -4% 30 2003 Q4 -2% -5% 2005 Q4 2007 Q4 PMI Employment Index 2009 Q4 2011 Q4 No Change 2013 Q4* QES Q/Q
  • 40. Recent growth in NI service sector output has fed through into higher levels of employment… NI Service Sector (excludes Retail) 3 month moving average Business activity 65 New Orders Growth accelerating 70 Employment 60 55 Contraction accelerating 50 45 40 35 Source: Markit Economics & Ulster Bank NI 30 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 41. All 3 economies post strong growth in services output in November with NI activity accelerating… Services Output (excluding Retail) 3 month moving average 70 UK NI RoI No Change 65 Expansion 60 55 50 Contraction 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  • 42. … and an acceleration in new orders growth too 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 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  • 43. Output prices within service sector firms over the last 3 months rise at their fastest rate in over 5 years NI Services 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-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 44. Employment growth is accelerating in the UK but NI firms signal a slowdown in service sector jobs growth Services Employment 3 month moving average 65 UK RoI NI No Change Expansion 60 55 50 Contraction 45 40 35 Source: Markit Economics & Ulster Bank NI PMI 30 Nov-03 Nov-05 Nov-07 Nov-09 Nov-11 Nov-13
  • 45. In Q3 the services PMI shows quarterly jobs growth for the 1st time since Q1 2008 with further growth in Q4 PMI Index 65 NI Services Employment: PMI v QES* Q/Q 1.5% *QES is DFP's official Quarterly Employment Survey of the number of jobs in NI and includes the public sector 60 1.0% Job gains Discontinuity in QES Series 55 0.5% 50 0.0% 45 -0.5% Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to October & November average Job losses 40 2003 Q4 -1.0% 2005 Q4 2007 Q4 PMI Employment Index 2009 Q4 No Change 2011 Q4 QES Q/Q 2013 Q4*
  • 46. Retailers summer boom extends into November but pace of growth has slowed Northern Ireland Retail PMI 3 monthly average 75 Business Activity New Orders Backlogs No Change Expansion 65 55 Contraction 45 35 Source: Markit Economics & Ulster Bank NI PMI 25 Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  • 47. Local retailers maintain pricing power in November NI Retail Input & Output Inflation 3 month moving average 90 Input Costs Output Prices No Change 80 Profits squeeze Inflation 70 60 50 Deflation 40 Source: Markit Economics & Ulster Bank NI 30 Nov-04 May-06 Nov-07 May-09 Nov-10 May-12 Nov-13
  • 48. NI construction sector reports growth in output, new orders & employment over the last 3 months… 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 Mar-09 Nov-09 Jul-10 Mar-11 Nov-11 Jul-12 Mar-13 Nov-13
  • 49. …and output prices have been rising 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 Nov-09 Jul-10 Mar-11 Nov-11 Jul-12 Mar-13 Nov-13
  • 50. NI’s construction PMI posted its 1st quarter of jobs growth in Q3 2013 since Q4 2007 with further growth in Q4 PMI Index NI Construction Employment: PMI v QES** 65 Q/Q 5.0% **QES is NI's official Quarterly Employment Survey of the no. of jobs in NI firms 60 Job gains 55 Discontinuity in QES Series 50 2.5% 0.0% 45 -2.5% 40 35 30 25 -5.0% Job losses Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to average for October & November -7.5% 20 2003 Q4 -10.0% 2005 Q4 2007 Q4 PMI Employment Index 2009 Q4 No Change 2011 Q4 2013 Q4* QES Q/Q
  • 51. Construction output accelerates in the UK, RoI and NI over the last 3 months Construction Sector Output - PMI 3 month moving average PMI Index NI UK RoI Expansion 60 50 Contraction 40 30 Source: Markit Economics 20 Mar-09 Nov-09 Jul-10 Mar-11 Nov-11 Jul-12 Mar-13 Nov-13
  • 52. New orders growth accelerating in all 3 economies Construction Sector New Orders - PMI 3 month moving average PMI Index UK RoI Expansion NI 60 50 Contraction 40 30 Source: Markit Economics 20 Mar-09 Nov-09 Jul-10 Mar-11 Nov-11 Jul-12 Mar-13 Nov-13
  • 53. Opportunities for NI firms within GB market. House building growth hits a 10-year high… UK Construction Activity - PMIs 3 month moving average 70 Housing Activity Commercial Activity Civil Engineering Activity Expansion 60 50 Contraction 40 30 Source: Markit Economics 20 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13
  • 54. …with opportunities returning within the RoI too Republic of Ireland Construction Activity - PMI 3 month moving average 70 Housing Activity Commercial Activity Engineering Activity Expansion 60 50 = No change 50 Contraction 40 30 Source: Markit Economics & Ulster Bank 20 Mar-07 Jul-08 Nov-09 Mar-11 Jul-12 Nov-13
  • 55. 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. Slide 55

×