Slide pack for the Ulster Bank Northern Ireland PMI for August 2015, including analysis of global, Eurozone, UK, UK regions, NI and Republic of Ireland performance by sector

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
August 2015 Survey Update
Issued 14th September 2015
Richard Ramsey
Chief Economist Northern Ireland
www.ulstereconomix.com
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 rate remains unchanged with services
expanding but manufacturing output falls to a 28-month low

4. EZ manufacturing & services sector growth accelerates with
retail sector’s growth easing & construction still contracting

5. The Eurozone’s composite PMI signals economic
growth rate accelerating in Q3 2015

6. The UK & NI slip down the manufacturing output growth
rankings with BRICS / Emerging markets not faring well

7. Australia, the Republic of Ireland & Spain posted the
fastest rates of service sector output growth in August

8. Italy, Germany and Spain posted an acceleration in their
respective growth rates in August

9. Composite PMIs for Japan & the Eurozone saw a pick-up
in their growth rates in August

10. The US (ISM) & Chinese manufacturing PMIs posted the
weakest growth rates in August

11. Chinese Composite PMI hits its lowest level since Feb-09

12. Alongside China, the PMIs for the Emerging Markets,
Russia and Brazil are all signalling contraction

13. Australia’s services & manufacturing sectors signal a
marked improvement in August, but will it last?

14. NI posts its 4th consecutive month of private sector growth
but pace of growth eases & still lags behind the UK & RoI

15. PMI suggests growth in DFP’s private sector composite index during
2014 but recovery stalls in Q1-15 with a modest rebound in Q2 & Q3-15

16. 2014 was the first year in 7 years that business activity,
new orders, employment & export orders all expanded
NI Private Sector Performance (PMI)
30
35
40
45
50
55
60
2007 2008 2009 2010 2011 2012 2013 2014
PMI Index
Business Activity New Orders Employment Export Orders
ExpansionContraction
Source: Markit Economics & Ulster Bank NI

17. NI recovery took hold in H2-13, all indicators improved in
H1-14 & eased in H2-14 with a further slowdown in H1-15
NI Private Sector Performance (PMI)
30
35
40
45
50
55
60
65
2006H
22007H
12007H
22008H
12008H
22009H
12009H
22010H
12010H
22011H
12011H
22012H
12012H
22013H
12013H
22014H
12014H
22015H
1
PMI Index
Business Activity New Orders Employment Export Orders
ExpansionContraction
Source: Markit Economics & Ulster Bank NI PMI

18. NI firms report a pick-up in the pace of job creation but
the growth rates for new orders & business activity slow

19. UK, RoI & NI firms continue to report growing order
books but the pace of expansion has eased

20. Backlogs of work continue to grow amongst RoI & NI firms
with levels of outstanding work amongst UK firms flat

21. Export orders are still struggling and not helped by
the sterling / euro exchange rate

22. PMI signalled a slowdown in the pace of jobs growth in
H2-14 but rebounds in H1-15

23. RoI firms maintain strong rates of jobs growth in August
with NI reporting a marked pick-up in hiring

24. Inflationary pressures remain subdued and output
prices are rising again

25. Regional
Comparisons

26. All UK regions continue to post output growth in August

27. Most UK regions posted strong rates of growth in the last 3
months but rates of growth remain weak in Scotland & NI

28. The RoI reported the fastest rate of growth in business
activity over the last 12 months & Scotland the slowest

29. The East of England & the RoI post the fastest rate of
employment growth with Scotland & NI the slowest

30. NI & Scotland post the weakest rates of job creation
within the UK over the last 3 months

31. Scotland, the North East & NI posted the weakest rates of
jobs growth over the last year with the RoI the strongest

32. Sectoral
Comparisons

33. All of the UK PMIs came in weaker than expected in
August with services signalling a marked slowdown

34. The UK posts strong rates of growth throughout 2014 &
more recently in Q2-15. PMI suggests growth will ease in Q3

35. RoI output growth across all sectors eases in August

36. All sectors in NI experienced weaker rates of growth
in H2-14 relative to H1-14 with H1-15 even weaker
NI Private Sector Business Activity (PMI)
30
35
40
45
50
55
60
65
2006H
22007H
12007H
22008H
12008H
22009H
12009H
22010H
12010H
22011H
12011H
22012H
12012H
22013H
12013H
22014H
12014H
22015H
1
PMI Index
Manufacturing Services Construction Retail
ExpansionContraction
Source: Markit Economics & Ulster Bank NI PMI

37. NI manufacturing & services firms report an easing in output
growth in Q3 but contraction within construction continues

38. Services & manufacturing firms are still increasing their
staffing levels whilst construction employment is falling

39. NI’s manufacturing firms appear to be experiencing a
slowdown across all broad indicators

40. RoI firms maintain strong rates of output growth but
rates of growth ease for both RoI and NI firms

41. NI firms report a more marked slowdown in manufacturing
orders growth than their equivalents in the UK & RoI

42. All economies bar Spain saw output growth slow or
contract (France & Greece) in August

43. Input cost inflation for manufacturers remains
subdued with output prices still falling

44. PMI signals moderation in jobs growth in H2-14 & Q1-15
following record high in Q2-14, rebound in Q2-15 eases in Q3

45. Service sector experiences a pick-up in orders &
employment growth but output growth slows

46. NI firms fail to match the robust rates of growth in the UK &
RoI service sectors but output growth is still accelerating

47. RoI & NI firms report a marked pick-up in new orders
growth whilst expansion within UK order books slows

48. NI’s services firms report a marked pick-up in input
cost inflation with some pricing power returning

49. NI services firms increased their staffing levels over the
last 3 months but below the rates of growth in the UK & RoI

50. Pace of job creation within the services sector eased in
H2-14 but has picked up in H1-15 & accelerated in Q3-15

51. NI retailers report a significant increase in sales and
new orders

52. NI retailers report a return of pricing power with output
prices rising. Input costs fall for the 1st time in the survey

53. NI’s construction firms report a decline in activity, new
orders and employment over the last three months

54. Input cost inflation remains subdued as pricing
power returns to local construction firms

55. NI’s construction PMI posts jobs growth Q3-13 to Q2-15
but this is largely due to NI firms working outside of NI

56. Very strong rates of output growth amongst RoI firms,
robust growth with UK firms & contraction amongst NI firms

57. NI orders decrease over last 3 months with UK growth
stabilising. RoI firms still reporting robust rates of growth

58. UK firms post a pick-up in civil engineering &
commercial activity with housing activity easing

59. UK sub-contractors remain in short-supply with the
rates that they charge still rising albeit a weaker rate

60. Optimism amongst UK construction firms remains high

61. RoI’s construction activity experiences a marked
slowdown in August across all sectors

62. RoI’s construction industry still reporting a decrease in
the availability of sub-contractors & rising rates of pay

63. RoI construction firms remain very optimistic about
the year ahead

64. Slide 64
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