This document provides a summary of the Ulster Bank Northern Ireland Purchasing Managers' Index for March 2016. It includes analysis of economic performance in global regions, Eurozone countries, the UK and its regions, Northern Ireland, and the Republic of Ireland. The PMI surveys track variables such as output, orders, employment and prices across sectors to provide an early indication of private sector economic trends. The document finds that global output growth improved in March, with most developed and emerging markets seeing PMI increases. Eurozone and UK manufacturing output increased while services slowed. Northern Ireland and the Republic of Ireland continued posting the fastest rates of service sector growth. Input costs and output price inflation eased across the regions.

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 2016 Survey Update
Issued 11th April 2016
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 improves in March

4. All countries bar Japan report an improvement in their
composite PMIs in March

5. Developed & Emerging Markets’ PMIs improve in March
with Emerging Markets hitting a 10-month high

6. Emerging Markets’ PMI back above 50 with India & Russia
both improving in March. Brazil’s recession continues

7. Chinese manufacturing PMI records its best reading in
13 months with composite PMI at an 11-month high

8. Diverging sector performance ‘Down Under’

9. France stagnant in March with Italy slowing to a 12-
month low but growth accelerates in Spain & RoI

10. Eurozone manufacturing output growth rises but
services slows with retail & construction contracting

11. Following an easing in GDP growth in H2-15, the Eurozone
composite PMI signals a further slowdown in Q1-16

12. The Republic of Ireland and Northern Ireland continue
to post the fastest rates of service sector output growth

13. US manufacturing activity returned to growth in the US,
accelerated in EZ with Japan & China still contracting

14. Developed Markets still outperform Emerging Markets.
The latter climbs above 50 for the first time in a year

15. Australia, Switzerland & Denmark record the fastest rates
of manufacturing output growth. BRICS still struggling

16. UK output growth picks up in March but NI output
expands at a faster rate for the second month in a row

17. PMI suggests private sector growth stabilises in Q4-15 but
accelerates in Q1 2016

18. 2014 was the 1st year in 7 years that the 4 main indicators
recorded expansion, repeated in 2015 but growth slowed

19. Output & orders growth accelerate in Q1-16 relative to
Q4 with exports slightly weaker & employment the same

20. NI firms reported a pick-up in output & new orders
growth with rates of job creation broadly unchanged

21. NI firms report a pick-up in new orders growth but still
lagging behind the RoI. UK new orders growth eases

22. NI & RoI firms still reporting rising backlogs while
their UK counterparts continue to post declines

23. NI export orders hit a 20-month high in March aided
by sterling weakness & new business from the RoI

24. RoI jobs growth continues at a robust rate while NI
and UK report similar rates of growth

25. Input cost and output price inflation ease

26. Regional
Comparisons

27. All UK regions bar Scotland & the North East signal
growth in March NI at the top of the regional league table

28. All UK regions bar Scotland posted growth in Q1
with NI outperforming the UK

29. The RoI reported the fastest growth rate in business
activity over the last year with NI & Scotland the slowest

30. The North East posts a sharp fall in employment levels with
NI’s rate of job creation marginally above the UK average

31. Scotland & the North East are the only 2 regions to report
falls in employment in Q1. NI above the UK average

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

33. Sectoral
Comparisons

34. Growth remains subdued across all sectors

35. The UK’s growth rate in Q4 improved slightly to 0.5% q/q,
in line with the PMI. A slower rate of growth expected in Q1

36. RoI manufacturing & services output growth picks up
in March as construction eases from its record high

37. NI retailers & services firms posted a marked pick-up
in business activity in Q1-16 relative to Q4-15

38. Services sector output accelerating, construction
slowing and manufacturing broadly flat

39. Rate of jobs growth eases within services & construction
sectors while manufacturing job losses continue

40. NI’s manufacturing firms report a marginal rise in
output growth but declines in new orders and jobs

41. NI manufacturing output flat in Q1 and still lags well
behind the UK and the RoI

42. NI firms report a marked divergence in manufacturing
orders growth than their equivalents in the UK & RoI

43. Manufacturing output for NI and Greece is broadly flat
in March

44. Higher wage costs are driving input costs higher with
output price deflation continuing

45. Slowdown in global manufacturing is hitting
employment levels most notably within the UK & NI

46. NI services sector experiences a pick-up in output and
new orders growth with employment growth easing

47. NI’s service sector output reports a marked acceleration
in its growth rate with the UK equivalent slowing

48. The rate of growth in NI’s services sector accelerates
to pre-downturn long-term average

49. NI firms report a marked pick-up in new orders growth,
overtaking the UK but still lagging behind the RoI

50. Input cost & output price inflation ease

51. NI & UK firms report an easing in the rate of service
sector employment growth in Q1 and both lag the RoI

52. NI retailers report a marked pick-up in demand following
a slowdown in Q4. Employment growth remains strong

53. NI retailers report flat input costs with output prices
falling at their fastest rate since March 2009

54. NI’s construction firms still in expansion mode though
rates of growth in output & employment are slowing

55. Input cost inflation accelerating with local firms
enjoying a high degree of pricing power

56. Output growth for RoI firms hits a record high in Q1
with pace of growth easing for NI & UK firms

57. New orders growth accelerating in the RoI with NI firms’
order books growing at a faster rate than their UK equivalents

58. UK firms report a slowdown in the rate of growth in house
building & commercial with a pick-up in civil engineering

59. UK sub-contractors remain in short-supply with rates
charged still rising albeit at slower rates than in 2015

60. Optimism amongst UK construction firms has eased
to its long-term average

61. All aspects of RoI construction activity have reported
a marked acceleration in their growth rates

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

63. RoI construction firms still remain very optimistic about
the year ahead and well above the long-term average

64. Slide 64
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