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

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 2017 Survey Update
Issued 12th September 2017
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 accelerates to a 28-mth high (53.9)
• Growth accelerates in China, US, Germany, Russia & RoI
• Chinese composite hits a 6-mth high of 52.4
• Emerging Markets’ PMI rebounds from 10-mth low to 52.1
• Eurozone composite PMI remains at 6-mth low (55.7)
• Germany up from 10-mth low (55.8), France (55.2) & Spain
(55.3) ease to 7-mth lows while Italian PMI eases to 55.8
• UK composite PMI slips to 6-mth low (53.8) with services
53.2 (11-mth low) & manufacturing at 7-mth high (58.4).
Construction eased to 12-mth low of 51.9.
• RoI business activity rebounds to a 3-mth high (58.1)
• NI firms’ output (55.0) & orders (54.9) growth accelerates to
8-mth highs. Input cost inflation accelerates
• NI services output at 17-mth highs & jobs hits a 41-mth high
August 2017 PMIs – Key highlights

4. Global output growth accelerates to its fastest rate
since Apr-15 with services & manufacturing picking up

5. The US & China show an improvement in August
with the UK PMI easing marginally

6. Divergence between Developed Markets PMI growth
rate and Emerging Markets

7. Emerging Markets’ growth rate rebounds from a 10-mth
low with growth rates in China & Russia accelerating

8. Chinese composite & manufacturing PMIs hit 6-mth highs

9. Germany & the RoI were the only two economies to
report faster rates of growth in August

10. The Eurozone’s manufacturing & construction output
growth accelerated in August.

11. PMI suggests another strong quarter of EZ economic
growth in Q3

12. Ireland, N.Ireland & Spain top the service sector growth
league with India & Brazil in contraction mode

13. Manufacturing growth accelerates across all major
economies most notably the US (76-mth high)

14. Developed Markets outperforming Emerging Markets

15. NI & RoI firms report faster rates of growth in August

16. PMI suggests private sector growth peaked in 2016 Q4 and
eased in H1. But Q3 looks more promising

17. 2014 was the 1st year in 7 years that the 4 main indicators
recorded expansion, repeated in 2015, 2016 & 2017 ytd

18. Output & new orders growth rates accelerate in Q3*
relative to Q2

19. NI firms report an acceleration in the pace of
expansion in activity, new orders & employment

20. NI new orders growth accelerates NI firms. While UK
& RoI firms signal a slowdown in orders growth

21. Backlogs of work mounting amongst NI firms

22. NI export orders growth accelerates in August

23. NI’s rate of employment growth quickens from six-
month low. Both NI & UK firms still lag the RoI

24. NI’s rate of employment growth has eased in recent
quarters but PMI suggests faster growth in Q2/Q3*

25. Input & output cost inflation continues to ease back
from their recent multi-year highs

26. Regional
Comparisons

27. West Midlands tops the regional growth table with London,
Scotland & the North East (contracting) at the bottom

28. The North East, Scotland & London post the slowest
rates of growth in the 3 months to August

29. The West Midlands reported the fastest growth rate
over the last 12 months with Scotland the slowest

30. NI’s pace of job creation accelerates in August but
remains below the UK average and 7 other regions

31. NI’s employment growth rate underperforming against
the UK average & most regions over the last 3 months

32. Scotland & the North East have reported the weakest
rates of jobs growth over the last year

33. Sectoral
Comparisons

34. Services & construction report a slowdown in output
growth while manufacturing’s growth rate accelerates

35. PMI suggests that don’t expect a meaningful rebound
in UK GDP growth in Q3

36. RoI firms signal a slowdown in construction but
manufacturing & services output accelerates

37. NI services industry & retail are the only sectors to
experience a pick-up in output growth in Q3*

38. Service sector records the fastest rates of growth
followed by retail. Construction contracting.

39. Construction & manufacturing firms report a slowdown
in jobs growth with hiring in services accelerating

40. Inflationary pressures easing across all sectors bar
construction

41. NI’s manufacturing firms report slower rates of
growth in output & employment but orders hold up

42. NI manufacturers post an easing in output growth with
RoI & UK firms maintaining robust rates of expansion

43. NI manufacturing output growth (last 3 months) dips
below its pre-downturn long-term average

44. UK & RoI firms continue to report robust rates of new
orders growth. NI growth rate holds steady

45. Manufacturing output growth accelerates for all
countries bar Spain

46. £ weakness exacerbated input cost inflation. NI/UK
input cost inflation rebounds from July’s 13-mth low

47. Input & output cost inflation hits a record high in Q1.
But significant easing in inflationary pressures in Q2/Q3

48. NI manufacturing firms report a slowdown in pace of
job creation while UK & RoI post stronger growth rates

49. NI’s services sector expansion accelerates

50. NI services sector output growth rate accelerates
further above the UK rate. But both still lag the RoI.

51. The growth rate in NI’s services sector approaching
its pre-downturn long-term average

52. New orders growth rate eases for RoI & UK but NI
firms signal a pick-up in rate of expansion

53. Input cost inflation continues to ease from its recent
6-year high with output price inflation more subdued

54. NI firms hiring at an accelerating rate and at a faster
rate than the UK. But both lagging behind the RoI

55. Retail sales rebound strongly in August with orders
also rising. Pace of retail jobs growth unchanged

56. NI retailers report an easing in inflation rates relative
to their recent highs

57. NI’s construction firms report falling output & orders
with employment flat

58. Input cost inflation remains high with firms increasing
prices at a much weaker rate

59. NI firms report no growth in output with their RoI &
UK counterparts posting faster rates of growth

60. NI firms report falling orders whilst growth in UK order
books is flat

61. UK firms report a drop in commercial activity with
commercial work flat. Housebuilding remains strong

62. Construction sector still reporting a shortage of
sub-contractors with rates charged rising

63. Optimism amongst UK construction firms remains
below its long-run average

64. RoI housing & commercial construction activity strong
but slowing while engineering output contracting

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

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

67. Slide 67
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