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
October 2019 Survey Update
Issued 11th November 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 slows to a 44-mth low of 50.8
• Growth accelerates in China, France, Italy & Russia
• US composite PMI (50.9) still flirting with recent 42-mth low of 50.7
• Developed Markets’ PMI slips to a 7-year low (50.3)
• Composite PMIs for Germany, India, Japan & UK all post contraction
• Fresh lows for India (27-mths), Japan (37-mths) & Spain (71-mths)
• Global manufacturing export orders fall for 14th month in a row
• Chinese manufacturing PMI hits a 32-mth high
• EZ composite rises off 75-mth low (50.1) to 50.6
• Ireland’s composite PMI eases to a 77-mth low (50.5)
• UK composite PMI (49.5) falls for the third month running. A feat last
seen 10½ years ago.
• UK services was the best performing sector though activity was flat.
October 2019 Global PMIs – Key highlights

4. • Private sector output fell for the eighth month running (44.9)
• Manufacturing was the only sector to record output growth
• Export orders (39.5) plunge for ninth month running
• Employment falls for the tenth month running (49.0)
• All sectors bar services (1st rise in 10-mths) losing staff
• Firms the least pessimistic in three months
• Retail reported the fastest rates of decline in output, orders & jobs
• Retail orders falling at their fastest pace (37.2) in almost 8½ years
• Retailers shedding jobs at their fastest pace in 7 years
• Construction orders plunge to an 83-mth low (38.0)
• NI saw the sharpest falls in output and orders of all UK regions
• NI firms remain the least optimistic in the UK for 12-mths ahead
• All sectors bar services expect output to be lower in 12-mths time
October 2019 Northern Ireland PMI – Key highlights

5. Despite a marginal improvement in manufacturing
activity, global output growth slows to a 44-month low

6. US flirts with recent 42-mth low with China & the
Eurozone improving. Japan hits a 37-mth low of 49.0

7. Emerging Markets PMI maintains growth rate at 4-mth
high while Developed Markets PMI slips to a 7-yr low

8. Emerging Markets growth rate remains steady. Russia &
China accelerate but India slows to a 27-mth low

9. Chinese composite driven higher by manufacturing
hitting a 32-mth high while services slips to a 8-mth low

10. Pace of growth picks up for France (11-mth high) & Italy but
Spain hits a 71-mth low & German contraction continues

11. EZ services & construction & output growth picks-up
while manufacturing continues to contract

12. EZ PMI slowdown continues suggesting lacklustre
GDP growth

13. Russia posts the fastest rates of growth in services
activity while NI records the fastest rates of decline

14. US manufacturing index remains in contraction with
Japan (40-mth low) & EZ. China rallies to a 32-mth high

15. Emerging Markets’ manufacturing PMI remains at a 6-mth
high with Developed Markets falling for 6th month in a row

16. RoI’s growth rate slows to 77-mth low. UK posts a third
monthly fall while NI records its’ 8th month of contraction

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

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

19. Business conditions deteriorating markedly in Q2-Q4*

20. NI’s private sector rates of contraction eases

21. RoI new orders growth quickens marginally from 76-mth
low while NI & UK order book contraction continues

22. NI & UK firms continue to report a decline in backlogs
with RoI firms also eating into outstanding work too

23. The slump in NI export orders continues

24. NI’s private sector loses jobs for a 10th month in a row
with UK following. RoI jobs growth continues

25. NI’s firms in hiring mode in 2018 / early 2019 but the PMI
suggests period of net employment gains have passed

26. Squeeze on profit margins continues

27. Regional
Comparisons

28. Only one UK region posts meaningful growth in October

29. NI posts the fastest rate of decline for all the UK
regions in the three months to October

30. Wales posts the fastest rates of output over the last
12-months with NI ranked 11th of 12

31. NI’s private sector remains more pessimistic about the
future than any other UK region by quite a margin

32. 10 of the UK regions report falling staffing levels

33. NI firms reported the fourth fastest rate of decline in
staffing levels over the last three months

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 in October while declines
in construction & manufacturing (marginal) continue

37. UK GDP growth in Q1 2019 much stronger than PMI but Q2
posts first fall (-0.2%) since 2012. Q3 PMI weaker than GDP

38. RoI construction & service activity fall to 74-mth & 87-mth
lows respectively. Manufacturing returns to growth

39. Manufacturing returns to growth in Q4* but pace of
contraction quickens for retail & construction

40. All sectors posting a contraction in output

41. Pace of hiring continues within construction with
manufacturing & services shedding jobs

42. Input cost inflationary pressures remain most elevated
within retail but rising amongst manufacturers

43. Output price inflationary pressures remain subdued
but picking up again within retail

44. NI manufacturers continue to report a marked
deterioration in business conditions

45. NI, UK & RoI manufacturing output contracting

46. NI manufacturing output contraction continues

47. Contraction in new orders across all three economies
with NI posting the sharpest rates of decline

48. NI’s manufacturing output outperforming vis-à-vis its
EU counterparts but Greece is the star performer

49. Global inflationary pressures remain subdued but NI
manufacturers report higher rates of input cost inflation

50. Manufacturing inflationary pressures picking up again

51. NI & UK manufacturing firms shedding staff with RoI’s
rate of hiring very subdued

52. NI’s services sector reports a deterioration in
conditions with falling output, orders & employment

53. NI firms report a sharp fall in service sector output with
UK growth flat & both economies lagging behind the RoI

54. NI’s services sector in contraction mode

55. Services firms in the RoI report a slowdown in new
orders growth while NI’s sharp contraction continues

56. A softening in service sector demand but accompanied
by some pick-up in pricing power recently

57. Slowdown in service sector activity hitting hiring. NI &
UK firms reducing headcount

58. Retail sales, orders & jobs falling

59. NI retailers report a marked increase in input cost inflation

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

61. Input cost inflation remains elevated with pricing
power subdued

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

63. RoI firms report a slowdown in new orders growth while UK
& NI firms report significant rates of contraction

64. RoI & UK construction industries still expect growth next
year whereas NI firms expect output to be markedly lower

65. All sectors within construction are contracting with
Civil Engineering at decade lows

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

67. Optimism amongst UK construction firms remains
unchanged but remains well below its’ long-term average

68. RoI housing activity still in expansion mode but ongoing
contraction within civil engineering & commercial

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

70. RoI construction firms’ confidence improves further
from August’s recent 8-1/2 year low

71. Slide 71
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