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Ulster Bank NI PMI December 2015 Slidepack

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Ulster Bank Northern Ireland Purchasing Managers Index (PMI) slidepack, December 2015. Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector

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Ulster Bank NI PMI December 2015 Slidepack

  1. 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 2015 Survey Update Issued 11th January 2016 Richard Ramsey Chief Economist Northern Ireland www.ulstereconomix.com richard.ramsey@ulsterbankcm.com Twitter @UB_Economics
  2. 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. 3. Global output growth eases to a 12-month low with both services & manufacturing slowing in December
  4. 4. Composite PMIs for China & the US (Markit PMI not ISM) both posted notable declines in December
  5. 5. Developed Markets PMI slips to an 11-month low (53.8) but continues to outperform Emerging Markets (49.5)
  6. 6. Emerging Markets PMI back below 50 but only just. India, bucks the wider trend being followed by its fellow BRICS
  7. 7. Chinese Composite PMI back below 50 and at a 21-month low with slowdown spreading to services (17-mth low)
  8. 8. Australia’s services sector hits a 13-month low while manufacturing eases from its recent 25-month high
  9. 9. Italy posts its highest reading since February 2011 with France slipping to an 11-month low
  10. 10. EZ manufacturing & services continue to post output growth but retail & construction activity still contracting
  11. 11. The Eurozone composite PMI signals a loss of momentum in Q3 but some improvement in Q4
  12. 12. The Republic of Ireland, Germany, the UK & Italy posted the fastest rates of service sector output growth
  13. 13. Manufacturing activity picked-up in EZ, with Japan maintaining its growth rate. US & China still contracting
  14. 14. Developed Markets continue to outperform Emerging Markets in terms of manufacturing
  15. 15. UK & RoI manufacturing output growth still ranks higher than most with NI in the bottom half of the table
  16. 16. UK, NI and RoI firms all report an easing in their respective rates of business growth in December
  17. 17. PMI suggests growth in DFP’s private sector composite index during 2014 but recovery stalls in Q1-15 with a modest rebound in Q2 to Q4
  18. 18. 2014 was the 1st year in 7 years that the 4 main indicators recorded expansion, repeated in 2015 but growth slowed
  19. 19. New orders growth slows in Q4 but output growth rate maintained with exports & jobs growth accelerating
  20. 20. NI firms reported an easing in the rate of output & jobs growth in December but a slight pick-up in orders growth
  21. 21. NI firms report a pick-up in new orders growth in December but still lag way behind the UK & RoI
  22. 22. Backlogs of work continue to grow amongst RoI firms with levels of outstanding work for NI & UK firms flat
  23. 23. Northern Ireland export orders rebound in December
  24. 24. RoI jobs growth continues but eases to a 23-month low. Employment growth for NI & UK eases slightly
  25. 25. PMI signalled a slowdown in jobs growth in H2-14 but employment growth has accelerated since then
  26. 26. Input cost inflation hit its highest rate for the year in December with output prices broadly flat
  27. 27. Regional Comparisons
  28. 28. All UK regions end 2015 in expansion mode but only just for Scotland
  29. 29. All UK regions posted growth in Q4 with Scotland’s growth rate marginal. NI still lagging behind the UK
  30. 30. The RoI reported the fastest rate of growth in business activity in 2015 with NI & Scotland the slowest
  31. 31. Scotland posts a fall in employment levels in December with NI’s rate of job creation broadly in line with the UK
  32. 32. Scotland and the North East post the weakest rates of job creation within the UK in Q4
  33. 33. Scotland, the North East & NI posted the weakest rates of jobs growth over the last year with the RoI the strongest
  34. 34. Sectoral Comparisons
  35. 35. UK construction industry was the only sector to post an acceleration in output growth in December
  36. 36. The UK’s growth rate in Q3 moderated in line with the PMI to 0.4% q/q. A slight improvement is expected in Q4
  37. 37. Manufacturing & construction output growth picks up in December while services activity slows from recent high
  38. 38. Retail & construction posted stronger rates of growth in H2 than H1 while services held steady & manufacturing slowed
  39. 39. NI manufacturing output flat, services output slowing but construction firms post a pick-up in output growth
  40. 40. Jobs growth within the services & construction sectors accelerates while manufacturing industry is losing jobs
  41. 41. NI’s manufacturing firms report a rebound in output & orders in December but pace of job losses accelerates
  42. 42. RoI & NI firms post a sharp slowdown in output growth in Q4 with UK firms recording a pick-up in activity
  43. 43. NI firms report a marked divergence in manufacturing orders growth than their equivalents in the UK & RoI
  44. 44. All economies saw an acceleration in output growth in December with Greece & NI back above 50
  45. 45. Higher wage costs are driving input costs higher with output price deflation continuing
  46. 46. NI manufacturing firms now reporting job losses at their fastest pace in 2½ years. UK & RoI are still creating jobs
  47. 47. NI PMI signals moderation in jobs growth in H2-14 & Q1-15 following record high in Q2-14. Job losses apparent in Q4
  48. 48. NI services sector experiences a pick-up in new orders & employment growth but output growth eases
  49. 49. NI diverges from the UK & RoI with firms reporting a slowdown in service sector output growth
  50. 50. The rate of growth in NI’s services sector slows and remains well below the pre-downturn long-term average
  51. 51. RoI firms still report very strong rates of new orders growth whilst growth amongst NI & UK firms lags behind
  52. 52. Input cost & output price inflation accelerate with output prices rising at their fastest rate since Sept-08
  53. 53. NI firms report a marked acceleration in jobs growth in Q4 which is now in line with the UK but well below RoI
  54. 54. Pace of job creation within services sector eased in H2- 14 but has picked up and accelerated throughout 2015
  55. 55. NI retailers report a modest fall in sales and a notable decline in orders but pace of jobs growth accelerates
  56. 56. NI retailers report output price deflation with output prices recently falling at their fastest rate since June 2009
  57. 57. NI’s construction firms report rising rates of output, orders & employment growth but activity largely linked to GB
  58. 58. Input cost inflation remains subdued as local firms continue to enjoy pricing power
  59. 59. NI’s construction PMI posts jobs growth Q3-13 to Q4-15 with a dip in employment in Q3-15
  60. 60. UK & RoI firms reporting strong rates of output growth with NI firms catching up
  61. 61. New orders growth accelerating in the UK, RoI and NI
  62. 62. UK firms report a slowdown in the rate of growth in civil engineering & housing activity with commercial holding up
  63. 63. UK sub-contractors remain in short-supply with rates charged still rising albeit the pace of change is slowing
  64. 64. Optimism amongst UK construction firms remains high
  65. 65. All aspects of RoI construction activity have reported a pick-up in their growth rates in recent months
  66. 66. RoI’s construction industry still reporting a decrease in the availability of sub-contractors & rising rates of pay
  67. 67. RoI construction firms still remain very optimistic about the year ahead
  68. 68. Slide 68 Disclaimer This document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and is not intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service in any jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a position or engage in transactions in any of the instruments mentioned. The information including any opinions expressed and the pricing given, is indicative, and constitute our judgement at time of publication and are subject to change without notice. The information contained herein should not be construed as advice, and is not intended to be construed as such. This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained here without seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to the information and disclaim all liability for use the recipient or their advisors make of the information. Over-the-counter (OTC) derivatives can involve a number of significant and complex risks which are dependent on the terms of the particular transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incur substantial costs if you wish to close out your position. Calls may be recorded.

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