The document provides an analysis of economic performance in Northern Ireland, the UK, Eurozone and other regions based on Purchasing Managers' Index surveys from July 2020. Key points include: - Northern Ireland's private sector returned to output growth for the first time in 17 months but job losses continued though at a slower pace. - Manufacturing and construction output grew strongly while services continued contracting but at a slower rate. - All UK regions except Scotland saw output growth while Northern Ireland remained the most pessimistic region for the year ahead.

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 2020 Survey Update
Issued 11th August 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. July 2020 Northern Ireland PMI – Key highlights

4. • Output rises (54.5) for the first time in 17 months & hits a 2yr high
• Orders rise (51.9) for the first time in 18 months
• Pace of job losses eases (44.3) & less marked than rest of the UK
• Export orders still falling at a rapid pace (40.7)
• Firms cut prices for the fourth time in five months
• Services output still falling (45.6) but 34% of firms posted a rise
• Manufacturing (59.8) & construction (60.8) output rises at fastest
rate in almost 6 years with retail recording fastest growth at 63.4
• 14% of manufacturing firms & 11% of service firms increased staff
• 20% of manufacturing firms & 32% of service firms reduced staff
• All sectors expect steep declines in activity in 12 months time
• All of UK regions bar Scotland posted output growth
• NI firms remain the most pessimistic UK region for the year ahead
July 2020 Northern Ireland PMI – Key highlights

5. Global manufacturing and services output return to
growth for the first time since January

6. The Eurozone & the US (only just) join China in
expansion mode. Japan’s contraction continues

7. Emerging Markets’ (50.8) & Developed (51.1) PMIs
return to growth for the first time in six months

8. Russia and China are the only two BRICS in expansion
mode with India still contracting at a rapid pace

9. Chinese manufacturing output growth hits a 9½-year
high (54.9) but services rate of growth (54.1) eases

10. Two-speed recovery in the Eurozone with France,
RoI & Germany outperforming Spain & Italy

11. EZ composite PMI returns to growth due to services &
manufacturing. Construction sector still contracting

12. NI posts one of the fastest rates of decline in services
activity in July. Russia reports the strongest rates of growth

13. EZ manufacturing joins China and the US in expansion
mode while the Japanese contraction continues

14. Emerging Markets’ manufacturing sector expands for the
first time in 6 months with Developed Markets lagging

15. All three economies return to growth in July - NI (54.5),
UK (57.1) & RoI (55.8)

16. NI composite economic index falls at a record pace in Q1 but
an even bigger decline is expected in Q2

17. 2020 has seen business conditions deteriorate at record rates

18. Recovery begins in Q3* (July) following Q2’s record
rate of decline

19. Output & orders return to growth but job losses
continue

20. All three economies report growth in order books –
UK (54.2), RoI (52.8) and NI (51.9)

21. NI firms report a much steeper rate of contraction in
backlogs than its UK & RoI counterparts

22. NI export orders slump continues

23. Output growth has returned but job losses continue
albeit the pace of decline has eased

24. Private sector employment (as of 2nd March) still
increasing but PMI signals big falls in Q1, Q2 & Q3*

25. Input cost inflationary pressures picking up (e.g.
PPE costs) while prices charged are falling

26. Regional
Comparisons

27. All UK regions bar Scotland posted growth in July

28. All regions have failed to record growth over the
last 3 months…

29. NI posts the fastest rates of output growth decline
over the last 12 months

30. NI is the least optimistic / most pessimistic about the
future than any other UK region

31. All 12 regions posted significant job losses in July

32. NI firms’ job losses less marked than most other regions

33. All regions post job losses over the last 12 months

34. Sectoral
Comparisons

35. All three UK sector PMIs post very strong growth in
output in July

36. Services & manufacturing join construction in
growth mode

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

38. All sectors bar services post growth at the start of Q3

39. All sectors experience output declines in the last 3
months

40. Rate of job losses remains sharp (3mmov.ave) across
all sectors though construction exceeds 50 in July

41. Input cost inflationary pressures accelerating for all
sectors bar retail

42. All sectors bar retail are cutting prices

43. NI manufacturers reporting an easing in the rate of
decline of orders & output (both >50 in June & July)

44. Strong growth in July takes the three month average
for manufacturing output growth close to 50

45. NI manufacturing output contraction eases (on a
three month moving average basis)

46. Pace of contraction in new orders amongst NI, UK & RoI
manufacturers continues to ease

47. RoI and NI manufacturers record faster rates of
output growth relative to their European peers

48. NI manufacturers report an acceleration in input cost
inflation following April’s record low

49. Manufacturing firms’ pricing power slumps squeezing
profitability further as cost pressures intensify

50. NI, UK & RoI manufacturers are still shedding staff at
significant rates

51. NI services contraction evident across employment,
orders and output

52. Service sector activity still falling across all economies
albeit the pace of decline has eased

53. NI’s services sector in contraction mode

54. Service sector order books have contracted over the
last 3 months but the pace of decline is easing

55. Service sector experiencing a divergence in input costs
(rising) and output prices (falling)

56. All economies posting sharp rates of decline in
services employment in the three months to July

57. Retail sales and orders have rebounded strongly but
job losses continue at a rapid rate

58. Retailers experiencing a profit squeeze

59. NI’s construction firms reported growth in output & jobs
in July but 3 month average remains in contraction

60. Construction firms reducing prices despite rising costs

61. NI (60.8), UK (58.1) & RoI (53.2) construction output rose
in July but 3 month average is still contracting

62. UK & RoI construction firms report a rise in orders in
July but 3 month moving average remains below 50

63. NI construction firms remain the least optimistic

64. House building is leading the construction recovery

65. Construction sector’s availability of sub-contractors
plunges & rebounds after lockdown restrictions are lifted

66. Optimism amongst UK construction firms slumped in April
matching October 2008’s record low on the rise since

67. RoI construction activity recovery is being led by
house building

68. Lifting lockdown restrictions sees a modest rise in the
availability of sub-contractors

69. RoI construction firms’ pessimism continues to ease from
April’s 12-year low but optimism is well below average

70. Slide 70
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