Global economic growth remains slow, with manufacturing activity contracting in many countries. While some areas like the US and Eurozone reported improvements, overall growth is still weak, especially in emerging markets. The Northern Ireland private sector continues to decline, with the sharpest falls in output, orders, and jobs of all UK regions. All sectors in Northern Ireland are contracting, with manufacturing, services, and construction all reporting decreases in activity. Business optimism in Northern Ireland also remains lower than other parts of the UK.

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
June 2019 Survey Update
Issued 8th
July 2019
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 ~3-yr low due to manufacturing 49.5 (80-mth low)
• Emerging Markets’ PMI hits a 3-yr low but Developed Markets rises
• Growth slows in China, India, Brazil (contraction), Russia (contraction)
• US composite PMI pick-up from May’s 3-yr low of 50.9 to 51.5
• Chinese composite PMI slows to 50.6 (8-mth low)
• 19 out of 30 countries now in manufacturing downturns (incl. Germany,
Canada, Italy, Spain, Poland, Malaysia, Turkey, UK & Czech Republic)
• Global manufacturing export orders fall for 10th
month in a row
• EZ composite accelerates to a 7-mth high (52.2) due largely to France.
Top 4 economies >50 for the first time in 9-mths.
• Ireland manufacturing activity (49.8) falls for the first time in 6 years
• UK composite PMI (incl. construction) falls below 50 (49.2) for the first
time since Jul-16. Slump in construction (43.1 & 10yr low) &
manufacturing (48.0) while services activity close to stagnation (50.2)
June 2019 Global PMIs – Key highlights

4. • Private sector growth fell for the fourth month running (44.1)
• All sectors posted a decline in output & orders in Q2 & H1
• Export orders (37.0) fall at their fastest pace since Aug-11
• Employment falls for the sixth month running (48.3)
• Q2 marked the weakest in 26 quarters for output, jobs & orders
• Services firms’ order books shrink at fastest rate since Dec-12
• Manufacturing output falls at steepest rate since Apr-09
• Manufacturing orders decline at fastest pace in almost 7 years
• Construction orders fall for the 10th month running
• NI saw the sharpest falls in output, orders & jobs of all UK regions
• NI firms remain the least optimistic in the UK for 12-mths ahead
• Retail & construction expect output to be lower in 12-mths time
June 2019 Northern Ireland PMI – Key highlights

5. Global output growth remains at a 3-yr low with
manufacturing falling to an 80-mth low 49.5

6. China sees a further slowdown in economic growth while
the US, Eurozone and Japan report some improvement

7. Emerging Markets PMI slows to a 3-yr low while its
Developed Markets’ equivalent eases off a 77-mth low

8. Emerging Markets PMI hits a 3-yr low. Growth slows in
China & India while Russia joins Brazil in contraction

9. Chinese manufacturing activity falls in June with
services slowing. Composite hits an 8-mth low

10. Pace of growth remains unchanged for Spain & Germany,
Italy remains broadly flat but French growth accelerates

11. EZ services growth pick-up while construction activity
slows & manufacturing remains in contraction

12. EZ PMI slowdown continues suggesting GDP growth
will follow but PMI overstated Q1 slowdown

13. Republic of Ireland posts the fastest rates of growth in
services activity while NI records the fastest rates of decline

14. US manufacturing index slows to a 32-mth low with
Japan, China and EZ contracting

15. Marginal fall in Emerging Markets’ manufacturing
growth with Developed Markets at a 79-mth low

16. RoI sees its growth rate slow to 6-yr low. UK returns
to contraction while NI’s rate of decline accelerates

17. PMI falling sharply suggesting that the Composite Index will
head south too.

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

19. Business conditions deteriorating markedly in Q2

20. NI’s private sector reports an acceleration in the rates of
decline in output & orders while rate of job losses eases

21. UK & NI firms see orders growth contract with NI’s at a
rapid rate. RoI growth slows to a 6-yr low

22. NI & UK firms continue to report a decline in backlogs with
the pace of contraction accelerating amongst NI firms

23. NI firms report the sharpest fall in export orders since
August 2011 (94-mths)

24. NI’s private sector shedding jobs for 6th month running
but the pace of decline eases in June

25. NI’s firms in hiring mode in 2018 / early 2019 but the
PMI suggests 2019 H2 will be more challenging

26. Squeeze on profit margins intensifies as pricing power fades

27. Regional
Comparisons

28. Six regions post a contraction in output in June

29. NI posts the fastest rate of decline for all the UK
regions in Q2

30. The North West posts the fastest rates of output
over the last 12-months with NI ranked 11th

31. NI’s private sector remains more pessimistic about the
future than any other UK region

32. NI was one of three UK regions to report job losses

33. NI was one of three regions to report falling
employment levels in Q2 and at the fastest pace

34. The North West and North East are at opposite ends
of the jobs growth table with the latter shedding jobs

35. Sectoral
Comparisons

36. UK services output growth nears stagnation while
construction & manufacturing hit 122 mth & 80mth lows

37. UK GDP growth in Q1 2019 (+0.5% q/q) much stronger
than PMI was indicating. But Q2 looks like stagnation

38. RoI services firm report robust growth but manufacturing
output growth subdued & construction’s expansion slows

39. Retail & construction post 3rd
successive quarterly fall in
Q2. Output falls for both services & manufacturing in Q2.

40. Slowdown evident across all sectors

41. Pace of hiring continues within construction with
manufacturing & services shedding jobs

42. Input cost inflationary pressures easing outside of
construction & retail

43. Output price inflationary pressures easing markedly
across all sectors (reflection of waning pricing power)

44. NI manufacturers report a marked slowdown in
business conditions

45. Stockpiling has been and gone. Manufacturing
output growth has slumped with NI faring the worst

46. NI manufacturing output contraction accelerates

47. Contraction in new orders across all three
economies with NI posting the sharpest rates of
decline

48. Northern Ireland’s manufacturing output
underperforming vis-à-vis its EU counterparts

49. UK & global inflationary pressures remain subdued and
well below the rate amongst NI’s manufacturers

50. Manufacturing inflationary pressures ease

51. NI & UK manufacturing firms shedding staff

52. NI’s services sector reports a deterioration in
conditions with falling output, orders & employment

53. UK & NI firms report a stall / fall in service sector
output. Both economies lag well behind the RoI

54. NI’s services sector in contraction mode with pace of
growth drifting further below its pre-downturn average

55. Services firms in the RoI continue to report strong
growth in orders, while UK is flat & NI falling sharply

56. A softening in service sector demand accompanied
by a weakening in pricing power

57. UK firms report a pick-up in staffing levels but NI firms
are still shedding jobs. RoI reports robust rates of hiring

58. Retailers report a slump in sales & new orders with
employment levels falling too

59. NI retailers feeling the squeeze on profit margins with
signs of discounting

60. NI’s construction firms report a marked fall in output &
new orders but continued growth in staffing levels

61. Input cost inflation remains elevated with pricing
power waning

62. NI & UK construction firms report falling output while
contrasting fortunes for the RoI (robust growth)

63. RoI firms report continued growth in new orders while UK
& NI firms report faster rates of contraction

64. Stark contrast in business confidence within the
construction industry between NI and the UK remains

65. All sectors within construction now contracting at a
rapid rate

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

67. Optimism amongst UK construction firms remains
well below long-term average

68. RoI housing activity holding up but commercial activity
slows & contraction accelerates within civil engineering

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

70. RoI construction firms still remain more upbeat about
future business activity than the long-run average

71. Slide 71
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