PMI

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
December 2019 Survey Update
Issued 13th January 2020
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 quickens to an 8-mth high (51.7) due to a pick-up
in services activity (52.1) but manufacturing slipped to 50.4
• Growth accelerates in US, EZ, India, Spain & Republic of Ireland
• US composite PMI rises to a 8-mth high of 52.7
• Chinese composite slips from Nov’s 21-mth high (53.2) to 52.6
• Developed Markets’ PMI quickens to a 5-mth high (51.2)
• Composite PMIs for Australia, Italy, Japan & UK all post contraction
• Global manufacturing export orders fall for 16th month in a row
• EZ composite improves to a 5-mth high of 50.9
• German manufacturing decline continues for 12th month running
• Ireland’s composite PMI accelerates to a 6-mth high of 53.0
• UK composite PMI (48.9) posts its sixth contraction in seven months
• UK construction (44.4) & manufacturing (47.5) post sharp declines with
services flat (50.0)
December 2019 Global PMIs – highlights

4. • Output falls for 10th mth in a row but pace of decline eases 44.2
• New orders fall for 11th mth running but rate of decline slows 44.3
• All four sectors saw output fall for the 7th month out of the last 8
• Export orders (40.9) plunge for 11th month running
• Staffing levels rise for the first time in 12 months (50.2)
• Retail sales fall at their fastest pace in 11 years (30.7)
• Firms’ selling prices fall for the first time in over 4 years
• Manufacturing & construction firms engaged in discounting prices
• All sectors bar retail expect growth over the next 12 months
• NI firms still experiencing the highest input cost inflation in the UK
• NI saw the sharpest falls in output and orders of all UK regions
• NI firms are the most optimistic about year ahead in 11 months
• NI firms remain the least optimistic in the UK for 12-mths ahead
December 2019 Northern Ireland PMI – Key highlights

5. Global output growth accelerates to an 8-mth high due
to services

6. US and Eurozone composite PMIs improve while China’s
growth rate slows. Japan hits a 68-mth low.

7. Emerging Markets PMI eases from 8-mth high while
Developed Markets PMI hits a 5-mth high

8. An easing in the rate of growth in Brazil, China & Russia
pushes the Emerging Markets PMI lower

9. Chinese composite slips to 52.6, down from
November’s 21-mth high (53.2)

10. Growth accelerates for Spain & RoI while Italy remains in
contraction. Germany returns to (marginal) growth

11. EZ services & construction output growth rates quicken
while the pace of manufacturing decline accelerates

12. EZ PMI slowdown continues suggesting lacklustre
GDP growth

13. Rep. of Ireland posts the fastest rates of service sector
growth while NI records the steepest pace of decline

14. US, EZ and Japan manufacturing indices remain in
contraction. US ISM index the weakest since June 2009

15. Emerging Markets’ manufacturing PMI stays at a 6-mth
high with Developed Markets falling for 8th month running

16. RoI’s growth rate rebounds off recent 77-mth low. UK
posts its fifth monthly fall while NI contraction continues

17. PMI falling sharply suggesting that the Composite Index will
head south too in Q3 & Q4.

18. 2019 has witnessed a U-turn in growth rates

19. Business conditions deteriorating markedly in Q2-Q4

20. NI private sector’s rates of contraction eases

21. RoI new orders growth accelerates while NI order books
continue to shrink. UK orders growth flat.

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

23. The slump in NI export orders continues

24. NI & UK firms see a return to jobs growth (marginal)
while RoI firms report an easing in pace of hiring

25. NI’s firms in hiring mode in Q3 despite PMI signalling
job losses throughout 2019

26. Squeeze on profit margins continues as pricing
power weakens

27. Regional
Comparisons

28. Only one UK region posts meaningful growth in December

29. NI posts the fastest rate of decline for all the UK
regions in Q4 2019

30. Wales posts the fastest rates of output growth in
2019 with NI ranked 12th out of 12 regions

31. NI’s private sector remains less optimistic about the
future than any other UK region

32. NI one of five regions reporting employment growth

33. NI firms’ rate of decline in staffing levels is in line
with the UK average

34. Yorkshire & the Humber & the North East are at
opposite ends of the jobs growth table

35. Sectoral
Comparisons

36. UK services output growth flat with construction &
manufacturing activity falling at rapid rates

37. UK PMI underestimated the pace of decline in UK GDP
growth in Q2 2019 but has overestimated the Q3 rate

38. RoI manufacturing remains the only sector in contraction
with construction output back in expansion mode

39. NI’s private sector ends the decade the way it
began… with all sectors in contraction mode

40. Pace of decline eases in Q4 for manufacturing &
services but accelerates for construction & retail

41. All sectors posting a contraction in output

42. Modest reductions in staffing levels

43. Input cost inflationary pressures remain most elevated
within retail

44. Pricing power fading fast for manufacturing and
services firms with retail price rises accelerating

45. NI manufacturers report an easing in the pace of
deterioration in Q4

46. NI, UK & RoI manufacturing output contracting

47. NI manufacturing output contraction continues

48. Contraction in NI & UK manufacturing orders continues

49. NI’s manufacturing output performance on a par with
Spain & Italy but Greece remains the star performer

50. Global & UK inflationary pressures remain subdued but
NI manufacturers still reporting inflationary pressures

51. Manufacturing firms’ pricing power slumps

52. NI & UK manufacturing firms shedding staff with RoI’s
headcount broadly flat

53. NI’s services sector reports an easing in the pace of
deterioration in conditions, notably employment

54. NI firms report a fall in service sector output with UK
broadly flat. Both economies lagging behind the RoI

55. NI’s services sector in contraction mode

56. Services firms in the RoI report a pick-up in new orders
growth while NI’s sharp contraction continues

57. A softening in service sector demand accompanied by
some easing in pricing power

58. Slowdown in service sector activity hitting hiring. NI &
UK firms staffing levels broadly flat

59. Retail sales, orders & jobs falling

60. NI retailers report a marked easing in input cost inflation

61. NI’s construction firms report a marked fall in output &
new orders but a modest reduction in staffing levels

62. Input cost inflation remains elevated with pricing
power subdued

63. NI, UK & RoI construction firms report falling output

64. NI, UK & RoI construction firms report declining orders

65. Optimism on the rise across all economies with NI
firms expecting growth for the first time in 18 months

66. All sectors within construction are contracting with
Civil Engineering at lowest level in over a decade

67. Construction sector’s shortage of sub-contractors picks
up again with rates charged still rising

68. Optimism amongst UK construction firms on the rise
but remains well below its’ long-term average

69. RoI housing activity returns to growth alongside
commercial. But civil engineering remains in contraction

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

71. RoI construction firms’ confidence returns to long-
term average

72. Slide 72
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