Northern Ireland PMI - August 2019

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 2019 Survey Update
Issued 9th September 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 despite manufacturing returning to growth
• Growth accelerates in Brazil, Russia, China and the Eurozone
• US composite PMI slows to a 42-mth low of 50.7 to 52.6
• US manufacturing index slows to a 43-month low
• Developed Markets’ PMI slips to an 80-mth low (51.0)
• More than half of manufacturing PMIs post a deterioration in activity
• Global manufacturing export orders fall for 12th month in a row
• EZ composite accelerates due to faster growth in Germany (services),
France and Spain
• Ireland’s composite PMI eases to a 75-mth low (51.0) with new orders
and employment slowing to 75 month lows
• UK composite PMI back below 50 (49.7) driven by manufacturing (47.4)
and construction (45.0). Services expanding modestly (50.6)
August 2019 Global PMIs – Key highlights

4. • Private sector output fell for the sixth month running (45.4)
• All 4 sectors posted a drop in output for the fourth month running
• Export orders (40.8) fell sharply for the seventh successive month
• Employment falls for the eighth month running (48.0)
• All sectors bar construction losing staff
• Business confidence slumps to a new series low (45.4)
• Retailers input costs rising at fastest rate in almost 3 years (74.0)
• Fastest rate of manufacturing job losses in >7yrs (45.7)
• Construction orders plunge to an 81-mth low (38.8)
• 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
• Retail, manufacturing & construction expect output to be lower in
12-mths time only services expects growth
August 2019 Northern Ireland PMI – Key highlights

5. Global output growth slows due to services sector
despite manufacturing returning to growth (50.1)

6. US growth slows to a 42-mth low with China, the
Eurozone and Japan posting faster rates of growth

7. Emerging Markets PMI picks up from recent lows while
Developed Markets PMI slips to an 80-mth low

8. Emerging Markets PMI hits a 4-mth high. Brazil, Russia
& China all post an acceleration in growth

9. Chinese composite quickens to a 4-mth high

10. Pace of growth quickens within the Eurozone due to
Germany, Spain and France. Italy close to stagnation

11. EZ services growth picks up but manufacturing output
continues to fall with construction activity falling too

12. EZ PMI slowdown levelling-off but still suggests
lacklustre growth

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

14. US manufacturing index slows to a 43-mth low and
signals contraction alongside Japan & the Eurozone

15. Marginal growth in Emerging Markets’ manufacturing
PMI with Developed Markets falling for 4th month in a row

16. RoI sees its growth rate slow to 75-mth low. UK dips
below 50 while NI’s steep rate of decline continues

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

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

19. Business conditions deteriorating markedly in Q2/Q3*

20. NI’s private sector rates of contraction eases but
output / orders are still falling at a rapid rate

21. RoI new orders growth slows to a 75-mth low. UK order
books shrinking again while NI’s contraction continues

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

23. The slump in NI export orders continues

24. NI’s private sector loses jobs for eighth month in a row
while UK hiring stalls. RoI jobs growth eases to 75-mth low

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. Six regions post a contraction in output in August

29. NI posts the fastest rate of decline for all the UK
regions in the three months to August 2019

30. The North West 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. NI was one of eight UK regions to report job losses

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

34. The North West and North East are at opposite ends
of the jobs growth table with the latter shedding jobs

35. Sectoral
Comparisons

36. UK services output growth close to stalling while declines
in construction & manufacturing output continues

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

38. RoI construction activity rebounds from multi-year lows
while service activity slows & manufacturing output falls

39. Retail’s pace of contraction eases markedly in Q3*
unlike the other sectors

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

43. Output price inflationary pressures remain subdued
but picking up again within manufacturing & services

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

45. NI, UK & RoI manufacturing output contracting

46. NI manufacturing output contraction accelerates

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

48. NI’s manufacturing output underperforming vis-à-vis
its EU counterparts with Greece the star performer

49. Global inflationary pressures remain subdued but NI
manufacturers report a pick-up in input cost inflation

50. Manufacturing inflationary pressures ease

51. NI & UK manufacturing firms shedding staff

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

53. NI firms report a fall in service sector output with UK
growth subdued. Both economies lag behind the RoI

54. NI’s services sector in contraction mode

55. Services firms in the RoI report strong growth in
orders, while UK rebounds but NI still falling sharply

56. A softening in service sector demand accompanied
by a weakening in pricing power

57. UK firms still report a pick-up in staffing levels but NI
firms are still shedding jobs. RoI firms hiring strongly

58. Retailers new orders picking-up after recent slump but
sales and employment still 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 construction firms report falling output while
contrasting fortunes for the RoI (continued growth)

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

64. Slump in business confidence for RoI & UK construction
industry while NI’s firms are even more pessimistic

65. All sectors within construction are contracting at a
rapid rate

66. Construction sector’s shortage of sub-contractors has
eased with rates charged still rising

67. Optimism amongst UK construction firms drifting
further below its’ long-term average

68. RoI housing & commercial activity are both holding up but
marked contraction continues within civil engineering

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

70. RoI construction firms’ confidence slumps to its
lowest level in over 8-1/2 years

71. Slide 71
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