Slidepack for March 2019 PMI Report

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
March 2019 Survey Update
Issued 8th
April 2019
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 rises to 52.8 but manufacturing at a 33-mth low
• Growth accelerates in China, Spain, Brazil, Italy & Russia
• Chinese composite PMI accelerates to 52.9 – a 9-mth high
• Growth slows in US, EZ, Germany, UK, Japan, France & India
• Developed Markets manufacturing exports fall at fastest rate in >6yrs
• Emerging Markets overtakes Developed Mkts for the 1st time in 6yrs
• 12 out of 30 countries now in manufacturing downturns (incl. Germany,
France, Japan, Italy, Poland, S.Korea, Turkey & the Czech Republic)
• Global manufacturing export orders fall for 7th
month in a row
• EZ composite slows with Germany (51.4) hitting a 69-mth low & France
contracting (48.9). Spain & Italy accelerate to 10-mth & 6-mth highs
• UK composite PMI (incl. construction) stagnates in March (50.0 – a 32-
mth low) with services contracting (48.9) for the 1st
time in 32-mths
• UK manufacturing output surges to 10-mth high as firms stockpile
ahead of Brexit at their fastest pace in 27 years
March 2019 Global PMIs – Key highlights

4. • Private sector growth falls (48.0) for the first time since July 2016
• All sectors bar manufacturing posted a decline in output
• New orders hit a 32-mth low (48.1)
• Employment falls to a 71-mth low with services at a 77-mth low
• NI firms raising goods / services prices at weakest pace in 32-mths
• Services output (48.9) & orders (49.5) decline
• Retail sales fall at their fastest pace in 4 years (43.6)
• Export orders fall at their sharpest rate in 70-mths (42.7)
• Manufacturing output growth 51.2 & marginal orders growth (50.4)
• Construction contraction continues with falling output (46.0) &
orders hitting a 27-mth low of 45.1
• NI remains the only UK region expecting output to fall in 12-mths
• Services, retail & construction expect output to fall in 12-mths time
• 6 UK regions including NI saw output & employment fall in March
March 2019 Northern Ireland PMI – Key highlights

5. Global output growth picks-up due to the services (4-mth
high) but manufacturing slips to a 33-mth low

6. China’s growth rate quickens to a 9-mth high while US, EZ,
UK (32-mth low) & Japan (30-mth low) see growth rates slow

7. Emerging Markets PMI overtakes its Developed Markets’
equivalent for the first time in six years

8. Emerging Markets PMI hits a 13-mth high driven by
China, Russia & Brazil. India slips to a 6-month low

9. Chinese manufacturing & services output growth
accelerates to 8-mth & 14-mth highs respectively

10. Pace of growth quickens for Spain & Italy (10 & 6-mth
highs) but France is contracting & Germany at a 69-mth
low

11. EZ services output accelerates to a 4-mth high but
manufacturing output growth hits a 6-yr low

12. EZ PMI slowdown continues suggesting GDP growth
will follow

13. Spain, Germany, the US & the RoI post the fastest rates
of services growth. UK & NI are at the bottom

14. US ISM manufacturing index quickens & Chinese PMI
returns to growth. Downturn continues for Japan & the EZ

15. Developed Markets’ manufacturing PMIs slips to a 75-
mth low with Emerging Markets hitting an 8-mth high

16. RoI sees its growth rate slow to a 69-mth lows. UK & NI
PMIs hit 32-mth lows with UK flat & NI contracting

17. PMI more positive than Composite Index. Latter includes hefty
falls in manufacturing output due to closure of JTI plant.

18. Output growth stagnates in Q1 2019 with rates of
growth in new orders, export orders & jobs all
decreasing

19. Business activity & new orders slip to weakest readings in
10 quarters while exports & employment at 23-quarter lows

20. Northern Ireland’s private sector reports falling output,
orders and employment in March

21. UK & NI firms report falling orders. Growth continues
amongst RoI firms but at its weakest pace in 29-mths

22. NI & UK firms continue to report a decline in backlogs

23. NI firms report the sharpest fall in export orders since
May 2013 (70-mths)

24. NI’s private sector shedding jobs for 3rd month running
and at their fastest rate since April 2013

25. NI’s firms in hiring mode in 2018 but early signs from
the Q1 PMIs that 2019 may be more challenging

26. Squeeze on profit margins remains

27. Regional
Comparisons

28. Seven regions post a stagnation / contraction in
output in March

29. The North West tops the regional growth table for Q1
with four regions including NI in contraction mode

30. The East Midlands posts the fastest rates of output
over the last 12-months with NI ranked seventh

31. NI’s private sector is the only UK region expecting
output to fall in 12-months time. RoI at a 70-mth low!

32. NI was one of six UK regions to report job losses

33. NI was one of seven regions to report falling employment
levels in Q1 2019

34. The North West tops the jobs growth table with the
North East (job losses) at the bottom

35. Sectoral
Comparisons

36. UK manufacturing output growth accelerates to a 10-
mth high but services output falls to a 32-mth low

37. Following GDP growth of 0.6% q/q in Q3 & 0.2% in
Q4 the soft PMI readings suggest a soft Q1

38. RoI output growth slows across all sectors

39. Construction & retail post 2nd successive quarterly fall
in Q1. Growth slows for services & manufacturing

40. Slowdown evident across all sectors with notable
deterioration in retail & slowdown within manufacturing

41. Pace of hiring continues within construction with
manufacturing broadly flat but falling within services

42. Input cost inflationary pressures easing within
construction industry

43. Output price inflationary pressures remain elevated
within construction & retail but easing elsewhere

44. NI manufacturers report a slowdown in business
conditions

45. Manufacturing output growth amongst UK firms
accelerated but has slowed dramatically for NI firms

46. NI manufacturing output growth (last 3 months) slows
and is back below its pre-downturn long-term average

47. New orders growth slows for RoI, UK and NI firms

48. NI’s manufacturing performance compares favourably with
France & Italy (both contracting) but lags Greece & Ireland

49. UK & global inflationary pressures remain subdued
while NI input cost inflation eases to a 33-mth low

50. Manufacturing inflationary pressures ease

51. NI, UK & RoI manufacturing firms are all shedding staff

52. NI’s services sector remains in expansion mode (3mma)
but perhaps not for long with employment already falling

53. Service sector output growth eases amongst RoI, UK &
NI firms. NI & UK continue to lag well behind the RoI

54. NI’s services sector in expansion mode but pace of
growth is drifting further below its pre-downturn average

55. New orders growth has weakened in recent months within
NI /UK service sector firms & lags well behind the RoI

56. Input cost inflation picks up slightly with service
firms still raising prices at a significant rate

57. NI & UK firms report declining employment levels

58. Retailers report a slump in sales & new orders with
jobs growth subdued

59. NI retailers feeling the squeeze on profit margins

60. NI’s construction firms report fall in output and new
orders but continued growth in staffing levels

61. Inflationary pressures remain intense amongst NI
construction firms but are beginning to ease

62. NI construction firms report falling output while
contrasting fortunes for UK (flat) & RoI (robust growth)

63. UK & RoI firms report continued growth in orders while
NI’s construction sector posts further declines in new work

64. Stark contrast in business confidence within the
construction industry between NI and the UK

65. Only housing activity remains in growth mode with civil
engineering & commercial stuck in contraction territory

66. Construction sector still reporting a shortage of sub-
contractors with rates charged rising

67. Optimism amongst UK construction firms remains
well below long-term average

68. RoI housing & commercial activity growth slows while
engineering activity remains in contraction mode

69. RoI’s construction firms still reporting a decline in the
availability of sub-contractors & rising rates of pay

70. RoI construction firms remain more upbeat about
future business activity than the long-run average

71. Slide 71
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