Ulster Bank NI 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
July 2017 Survey Update
Issued 13th
August 2018
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 with manufacturing at a 22-mth low
• Growth slows in China, Japan, the Eurozone & the US
• China services & manufacturing PMIs slip to 4-mth & 8-mth lows
• Global manufacturing export orders fall to a 2-yr low of 50.3
• Emerging Markets PMI unchanged but contrasting fortunes. India
at a 21-mth high while Russia falls to a 26-mth low
• Developed Markets PMI slows to a 4-mth low
• EZ composite PMI slows from 54.9 to 54.3. Spain (56-mth low),
France & Italy all post slower rates of growth in July with Germany
bucking the trend with growth reaching a 4-mth high
• RoI composite PMI slows to a 4-mth low of 56.9
• UK composite PMI slows to a 3-mth low of 53.8
• NI, Scotland & Wales report faster rates of output growth but
England slows
• NI reports the fastest rate of growth in orders / output of all regions
July 2018 Global PMIs – Key highlights

4. • Business growth quickens to a 6-month high of 56.6 – above pre-
downturn long-term average of 55.1.
• NI firms’ optimism for the year ahead slips to an 16-mth low & is
the lowest of any UK region
• Jobs growth for 42nd
month in a row but 51.5 marks a 12-mth low
• Growth in new order books accelerates to 6-month high of 55.0
• All sectors bar manufacturing saw faster rates of output growth
• Manufacturing output growth slows from June’s 44-month high
• Construction activity hits a 46-month high of 57.0
• Service sector activity quickens to 55.8 but still below LT average
• Retail sales & orders growth accelerates to a 5-month high
• Confidence within construction, manufacturing & retail firms has
never been lower in the last 17 months. Services more upbeat
• Price of goods & services rising at fastest rate in a decade
July 2018 Northern Ireland PMI – Key highlights

5. Global output growth slows with manufacturing output
hitting a 22-month low

6. Slower rates of growth evident across all PMIs in July

7. Developed Markets PMI slows to a 4-month low in July

8. Emerging Markets’ PMI unchanged but hides contrasting
performance. Russia at 26-mth low & India at a 21-mth
high

9. Chinese services and manufacturing PMIs hit 4-
month and 8-month lows respectively

10. Germany was the only country not to see its rate of
growth ease in July

11. Eurozone sees some softening in activity with
construction output easing to a 21-month low

12. EZ PMI suggested a more notable slowdown in Q2
than has occurred

13. The Republic of Ireland, US & NI post the fastest
rates of services growth in July

14. Manufacturing PMIs for China and Japan slip to 8-
month and 11-month lows respectively

15. Developed & Emerging Markets’ Manufacturing PMIs
slip to 12-month lows

16. NI’s private sector reports an acceleration in activity for
the fourth month in a row & at a faster rate than the UK

17. PMI more positive than Composite Index. Latter includes hefty
falls in manufacturing output due to closure of JTI plant.

18. Output growth running at a 4-yr high year-to-date H1
2018 with exports potentially on course for a 14-yr high

19. Business activity and new orders growth accelerating
but pace of jobs and export orders growth is slowing

20. NI firms report an improvement in the pace of expansion
in activity & orders but job creation eases in July

21. NI & RoI firms report a pick-up in new orders with
UK companies signalling a slowdown

22. NI & RoI firms continue to report rising backlogs of work

23. NI firms continue to post strong rates of growth in
export orders

24. NI’s rate of employment growth eases in July and
matched that of the UK

25. NI’s firms in hiring mode in H1 2018 though pace of job
creation has been slowing into H2

26. Squeeze on profit margins intensifies

27. Regional
Comparisons

28. NI’s private sector signals the fastest rate of growth
of all the UK regions

29. East Midlands & West Midlands top the growth table
for 3-months to July with NI ranked 3rd

30. The East Midlands posts the fastest rates of growth
over the last year with the North East the slowest

31. NI’s private sector the least optimistic within the UK

32. NI’s pace of job creation in line with the UK average

33. During the three months to July NI’s employment
growth rate exceeded most of the other UK regions

34. Scotland reported the fastest rate of jobs growth over
the last year. NI broadly in line with the UK average

35. Sectoral
Comparisons

36. UK construction output growth accelerates sharply
while manufacturing & services firms report an easing

37. UK PMI suggests a loss of momentum in Q1 2018
but better weather should see a rebound in Q2

38. All sectors of the RoI economy continue to report
strong rates of growth in July

39. Acceleration in NI private sector output growth
evident in construction & services sectors

40. All NI sectors report a pick-up in output growth
during the three months to July

41. Pace of hiring quickens within construction sector but
eases in services with manufacturing losing jobs

42. Retail remains the only sector reporting a notable
easing in input cost inflationary pressures

43. Retail remains the only sector reporting a notable
easing in output price inflationary pressures

44. NI’s manufacturing firms reporting strong rates of
growth in output & new orders but not jobs

45. Manufacturing output growth remains strong amongst
UK, NI & RoI firms

46. NI manufacturing output growth (last 3 months) still
remains above its pre-downturn long-term average

47. New orders growth slows for NI & UK manufacturers
while their RoI firms reports a notable pick-up

48. NI’s manufacturing PMI performing well against its
European peers. Italian PMI hits a 43-mth low

49. Inflationary pressures easing again

50. Squeeze on manufacturing profit margins continues

51. Employment growth stalls for NI manufacturing firms
while pace of job creation quickens for RoI & UK firms

52. NI’s services sector reports a pick-up in activity and
orders following Q1 soft patch but jobs growth slows

53. Service sector rebound in output growth evident in UK
& NI firms but pace of growth still lags behind the RoI

54. NI’s services sector activity quickens but remains
below its pre-downturn long-term average growth rate

55. New orders growth picks up significantly within NI
service sector firms but still lags behind the RoI

56. Input cost inflation remains intense with service
sector firms raising prices at an increasing rate

57. Pace of hiring accelerates amongst RoI firms but
slows for UK and NI services firms

58. Retail sales & new orders growth picks up markedly
over the last three months

59. NI retailers raising prices at there slowest rate in over
two years

60. NI’s construction firms report a pick up in business
conditions in the three months to July

61. Inflationary pressures remain intense amongst NI
construction firms

62. RoI, UK and NI firms all report a pick-up in
construction output in the three months to July

63. UK & NI firms report an upturn in order books but still
well below the rates of growth in the RoI

64. Pick-up in UK construction activity evident across all
sub-sectors

65. Construction sector still reporting a shortage of sub-
contractors with rates charged rising albeit more slowly

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

67. RoI commercial & housing activity continues to expand
at robust rates with engineering activity picking up too

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

69. RoI construction firms very optimistic about the next
12 months & still well above the long-term average

70. Slide 70
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