The Ulster Bank Northern Ireland Purchasing Managers Index (PMI) report for January 2020 highlights a mixed performance across various economies, with global output growth increasing to a 10-month high primarily due to the services sector. Northern Ireland continues to experience the steepest declines in output and orders among UK regions, while optimism about the future is gradually rising despite ongoing contractions in multiple sectors. The report emphasizes significant inflationary pressures and fluctuating hiring trends across different regions and sectors.

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
January 2020 Survey Update
Issued 10th February 2020
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 quickens to a 10-mth high (52.2) due largely to
services activity (52.7) but manufacturing eased up to 50.8
• Growth accelerates in US, EZ, UK, Brazil, Russia & Republic of Ireland
• US composite PMI rises to a 10-mth high of 53.3
• Chinese composite slips to a 4-mth low of 51.9
• Developed Markets’ PMI quickens to a 10-mth high (52.1)
• Developed Markets’ export orders fall for 13th successive month
• Global manufacturing export orders fall for 17th month in a row
• EZ composite improves to a 5-mth high of 51.3
• German manufacturing decline continues for 13th month running (45.3)
• Ireland’s composite PMI accelerates to an 11-mth high of 54.6
• UK composite PMI returns to growth & a 16-mth high of 52.8
• UK services accelerates to a 16-mth high (53.9) while manufacturing
activity was flat and construction’s contraction continues (48.4)
January 2020 Global PMIs – highlights

4. • Output falls for 11th mth in a row but pace of decline eases 46.8
• New orders stabilise (49.8) with a pick-up in domestic orders
• All four sectors saw output fall for the 8th month out of the last 9
• Export orders slump continues for 12th month running (41.9)
• Manufacturing’s rate of decline in output accelerates to 42.8
• Services orders rise for the 1st time in 11 months (51.3)
• Staffing levels rise for the 2nd month running (51.0)
• Services firms hired at their fastest pace in 20 months (53.3)
• All sectors expect growth over the next 12 months
• NI firms still experiencing the highest input cost inflation in the UK
• NI saw the sharpest falls in output and orders of all UK regions
• NI firms are the most optimistic about year ahead in 21 months
• After Scotland, NI firms are the least optimistic for 12-mths ahead
January 2020 Northern Ireland PMI – Key highlights

5. Global output growth accelerates to a 10-mth high due
primarily to services

6. China bucks the trend of faster rates of economic growth

7. Developed Markets PMI hits a 10-mth high

8. Brazil, Russia and India all see growth accelerate with
India expanding at a 7-year high

9. Chinese composite slips to 51.9 (4-mth low) with
services and manufacturing growth rates slowing

10. Growth accelerates for Germany & RoI while slowdown
evident in France & Spain. Italy returns to (marginal) growth

11. EZ construction output growth rates quicken while the
pace of manufacturing decline slows

12. EZ PMI slowdown in Q4 with modest improvement at
the start of Q1

13. Rep. of Ireland posts the fastest rates of service sector
growth while NI records the steepest pace of decline

14. EZ & Japan manufacturing indices remain in contraction
with China slowing. US ISM index expanding again

15. Emerging Markets’ manufacturing PMI stays at a 6-mth
high with Developed Markets falling for 9th month running

16. RoI & the UK post a marked improvement in output
growth in January while NI’s contraction continues

17. PMI falling sharply suggesting that the Composite Index will
head south too in Q3 & Q4.

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

19. Business conditions deteriorating markedly in Q2-Q4

20. NI private sector’s rates of contraction eases

21. RoI & UK new orders growth accelerates while NI order
books continue to shrink (but only just)

22. NI & UK firms continue to report a decline in backlogs

23. The slump in NI export orders continues

24. NI, UK & RoI firms all see rates of hiring increase in
January

25. NI’s firms in hiring mode in Q3 despite PMI signalling
job losses throughout 2019

26. Squeeze on profit margins continues as pricing
power weakens

27. Regional
Comparisons

28. 9 UK regions post growth in January but not NI

29. NI posts the fastest rate of decline for all the UK
regions in the three months to January 2020

30. London posts the fastest rates of output growth over
the last year with NI ranked 12th out of 12 regions

31. NI and Scotland are the least optimistic about the
future than any other UK region

32. All regions bar the North East reporting jobs growth

33. NI firms’ employment levels broadly flat over the
last three months

34. Yorkshire & the Humber & the North East are at
opposite ends of the jobs growth table

35. Sectoral
Comparisons

36. UK services output growth accelerates with
manufacturing flat and construction still contracting

37. UK PMI underestimated the pace of decline in UK GDP
growth in Q2 but overestimated Q3. Q4 looks flat

38. RoI manufacturing & service activity accelerates in
January with construction output growth easing back

39. NI’s private sector ends the decade the way it
began… with all sectors in contraction mode

40. Pace of decline eases in Q4 for manufacturing &
services but accelerates for construction & retail

41. All sectors posting a contraction in output

42. Construction & services firms hiring again

43. Input cost inflationary pressures easing for retailers
while services firms report a pick-up

44. Pricing power fading for manufacturing and retailers
with some improvement for construction & services

45. NI manufacturers start the new year the way they
ended 2019

46. NI, UK & RoI manufacturing output contracting

47. NI manufacturing output contraction continues

48. Contraction in NI & UK manufacturing orders continues

49. NI’s manufacturing output underperforming against its
European peers

50. Global & UK inflationary pressures remain subdued but
NI manufacturers still reporting inflationary pressures

51. Manufacturing firms’ pricing power slumps

52. NI & UK manufacturing firms shedding staff with RoI’s
headcount broadly flat

53. NI’s services sector reports an easing in the pace of
deterioration in conditions with employment rising

54. NI firms report a fall in service sector output with UK
expanding again but both economies lag the RoI

55. NI’s services sector in contraction mode

56. Services firms in the RoI report a marked pick-up in
new orders growth with UK following & NI trailing

57. A softening in service sector demand accompanied by
some easing in pricing power

58. NI & UK services firms report a pick-up in hiring but
still lag well behind their RoI peers

59. Retail sales, orders & jobs still falling

60. NI retailers report a marked easing in input cost inflation

61. NI’s construction firms report a marked fall in output &
new orders but staffing levels are increasing again

62. Input cost inflation remains elevated with pricing
power subdued

63. NI & UK construction firms report falling output with RoI
activity flat

64. NI, UK & RoI construction firms report declining orders

65. Optimism on the rise across all economies

66. All sectors within construction are still contracting
though the pace of the decline has eased

67. Construction sector’s availability of sub-contractors
picks up again with rates charged still rising

68. Optimism amongst UK construction firms returns to
its’ long-term average

69. RoI commercial activity accelerates in January with
housing and engineering activity contracting

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

71. RoI construction firms’ confidence shoots back
above its’ long-term average

72. Slide 72
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