Slide pack for the Ulster Bank NI PMI, May 2016, including 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
May 2016 Survey Update
Issued 13th June 2016
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 in May with manufacturing’s
rate of expansion at a 42-month low

4. China & the US report a deterioration in their PMIs in May
with UK & the EZ improving & Japan still contracting

5. Developed Markets’ PMI stuck in low growth mode
while Emerging Markets stagnates

6. Emerging Markets’ PMI dips below 50.0 with Russia &
India in low growth mode & Brazil’s recession continues

7. Chinese manufacturing and services PMIs both
deteriorate in May

8. Services & manufacturing in low growth mode
‘Down Under’

9. France, Germany, the UK & Ireland all reported a
pick-up in rates of growth with Italy & Spain slowing

10. EZ manufacturing output growth eases. Growth rates
improve for retail & services. Construction still contracting

11. GDP picked up in Q1-16 but composite PMI signals that
the Eurozone economy is stuck in a low gear in Q2

12. The RoI continues to post the fastest rate of output
growth in services with Brazil contracting at a rapid rate

13. Manufacturing PMIs for China, the EZ and Japan
deteriorate in May with the US (ISM) bucking the trend

14. Developed Markets still outperform Emerging Markets.
The latter is below 50 for 13th time in 14 months

15. Denmark, Switzerland & New Zealand record the fastest
rates of manufacturing growth. BRICS still struggling

16. UK & RoI firms report an improvement in output growth
in May while NI firms report a marked slowdown

17. PMI suggests private sector growth stabilises in Q4-15,
accelerates in Q1 2016 but eases in Q2*

18. 2014 was the 1st year in 7 years that the 4 main indicators
recorded expansion, repeated in 2015 but growth slowed

19. Output, orders & jobs growth eases in Q2* relative to
Q1 with only exports growth accelerating

20. NI firms reported a marked slowdown in output &
jobs growth with new orders growth flat

21. RoI firms are still reporting strong growth in new orders
while NI & UK firms post a marked slowdown in growth

22. RoI firms still reporting rising backlogs while their
UK & NI counterparts post declines

23. NI export orders rise for the 4th month in a row in May
but only just

24. RoI jobs growth continues at a robust rate while NI and
UK report a sharp slowdown in employment creation

25. Input cost inflation accelerates with output price
inflation holding steady

26. Regional
Comparisons

27. The East Midlands tops the regional growth table in May
with Scotland stagnating and the North East contracting

28. All UK regions bar Scotland & the North East posted
growth in 3 mths to May with NI in the top half of the table

29. The RoI reported the fastest growth rate in business
activity over the last year with Scotland the slowest

30. Yorkshire & Humberside and Scotland post job losses
with NI’s rate of job creation in line with the UK average

31. Yorkshire & Humberside, Scotland & the North East report
job losses in 3 months to May. NI above the UK average

32. Scotland was the only region to post job losses over
the last year with NI below the UK average

33. Sectoral
Comparisons

34. Growth remains subdued across all sectors within the UK

35. The UK’s growth rate slowed in Q1 to 0.4% and is
expected to slow further in Q2 based on PMI

36. Services was the only sector within the RoI to report a
pick-up in activity in May with slowdowns elsewhere

37. NI retailers & services firms posted a marked pick-up
in business activity in Q1-16 with growth easing in Q2*

38. Services sector’s robust rates of output growth now
slowing with construction & manufacturing contracting

39. Rate of jobs growth eases within services & notably
construction while manufacturing job losses continue

40. NI’s manufacturing firms report a marked pick-up in
orders but fall in output & employment continues

41. NI manufacturing output in contraction mode with
UK output growth slowing significantly

42. NI manufacturing output in contraction mode and
well below pre-downturn long-term average

43. NI firms report a e pick-up in orders growth with RoI
reporting a marked slowdown & UK modest growth

44. Manufacturing output contracts for NI, France &
Greece with growth rates slowing elsewhere

45. Higher wage costs (NLW introduced) & energy costs
push input cost inflation to a 22-month high

46. Slowdown in global manufacturing is hitting employment
levels most notably within the UK & NI

47. NI services sector experiences a slowdown across all
key indicators

48. NI’s services sector reports a slowdown in output
growth but still outperforms the UK

49. The rate of growth in NI’s services sector falls back
below its pre-downturn long-term average

50. NI firms report an easing in new orders growth after
recent high as growth slows markedly amongst UK firms

51. Input cost inflation picks up with output price rises
continuing albeit at a slightly weaker rate

52. NI & UK firms report an easing in the rate of service sector
employment growth with RoI’s growth rate maintained

53. NI retailers are still reporting strong demand & jobs growth
but sharp slowdown in orders suggests it won’t last

54. NI retailers report a marked pick-up in input cost
inflation while output prices continue to fall

55. NI’s construction firms in contraction mode with
employment growth flat

56. Input cost inflation eases with local firms enjoying a
high degree of pricing power

57. Output growth for RoI firms eases with a more significant
slowdown for UK firms & contraction amongst NI firms

58. NI firms post a contraction in new orders growth with a
rapid slowdown within UK & continued growth within RoI

59. UK firms report a slowdown in the rate of growth
across all sectors

60. UK sub-contractors remain in short-supply with rates
charged still rising albeit at slower rates than in 2015

61. Optimism amongst UK construction firms has been
falling lately and is below its long-term average

62. All aspects of RoI construction activity have reported
a marked slowdown in their growth rates

63. RoI’s construction industry still reporting a decrease in
the availability of sub-contractors & rising rates of pay

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

65. Slide 65
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