Slidepack for the Ulster Bank Northern Ireland PMI report, April 2017, 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
April 2017 Survey Update
Issued 16th May 2017
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 (53.7) just shy of January’s 13-mth high
• Growth accelerates in UK, EZ & the Republic of Ireland
• Chinese composite PMI slows to a 7-month low (51.2)
• Emerging Markets Composite PMI eases from 31-mth high
• Eurozone composite PMI (56.8) hits a 6-yr high
• Italian & Spanish PMIs hit their highest levels since Jul-07 &
Aug-15 respectively
• Developed Market manufacturing PMI just shy of recent 35-
mth high with Emerging Markets slipping back to 3-mth low
• UK composite PMI (56.0) accelerates to a 4-mth high with
the West Midlands (60.3) the fastest growing region
• RoI business activity accelerates to a 3-mth high (58.7)
• NI firms’ output growth accelerates to 54.3 – its fastest rate of
growth this year
April 2017 PMIs – Key highlights

4. Global output growth rate remains unchanged for
services but manufacturing eases to a 3-month low

5. Growth accelerates in the EZ, UK & US (marginally).
While Japan & China post slower rates of growth in April

6. Developed Markets PMI growth rate quickens to 3-
mth high & Emerging Markets eases to a 3-mth low

7. Emerging Markets’ growth rate eases due to China,
India & Russia. Brazil expands for 1st time in 26 months

8. Chinese services PMI hits a 11-month low with
manufacturing activity slowing to a 7-month low

9. Italy reports its fastest rate of growth since Jul-07
with strong rates of growth recorded elsewhere

10. Growth in EZ services, manufacturing & construction
output at or close to 6-year highs

11. Early indications from the PMI suggests EZ may see
an acceleration in Q2 economic growth

12. Ireland, Spain & France top the service sector growth
league with Brazil back in expansion mode too

13. Euro-zone & Japanese manufacturing bucks the
wider trend with activity accelerating in April

14. Developed Markets continue to outperform the
Emerging Markets

15. NI & UK firms report faster rates of growth in April. NI
firms reporting strongest rate of growth so far in 2017

16. PMI suggests private sector growth stalls in Q3, rebounds in Q4
with momentum retained into Q1/Q2

17. 2014 was the 1st year in 7 years that the 4 main indicators
recorded expansion, repeated in 2015 & 2016 (& Q1* 2017)

18. Output, export orders & employment growth rates
quicken in Q2* (April) relative to Q1

19. NI firms report a pick-up in output & jobs growth while
the rate of growth new orders remains unchanged

20. RoI firms’ orders growing at a robust rate with UK growth
accelerating. NI orders growth remains at a 5-mth low

21. NI firms no longer report rising backlogs

22. NI export orders growth accelerates to a 3-month high

23. NI’s rate of employment growth exceeds the UK for 3rd
month in a row. Both NI & UK lag behind the RoI

24. Input and output cost inflation eases from their recent
multi-year highs

25. Regional
Comparisons

26. The West & East Midlands topped the regional growth
table in April with Scotland & the North East at the bottom

27. Scotland, the North East & NI post the weakest growth
rates of all the UK regions in the 3 months to April

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

29. NI reports the 6th fastest rate of job creation in the UK
with the North East the only region not posting growth

30. NI private sector employment growth outperforming
the UK average over the last 3 months

31. Scotland & the North East (job losses) have reported
the weakest rates of jobs growth over the last year

32. Sectoral
Comparisons

33. UK output growth rates accelerate for all sectors in
April

34. PMI suggests that UK economic growth could
rebound in Q2 following a disappointing Q1

35. All sectors within the RoI reported faster rates of
growth in April

36. Unlike retail & construction, NI manufacturing &
services post faster rates of growth in Q2*

37. Service sector growth accelerates with retail slowing.
Construction recovering & manufacturing slowing

38. Construction, manufacturing & services firms report a
pick-up in staffing levels in the 3 months to April

39. NI’s manufacturing firms report faster rates of growth in
output, employment & new orders in the 3-mths to April

40. NI manufacturing output growth accelerates following
its recent slowdown. UK & RoI output growth slows

41. NI manufacturing output growth below its pre-
downturn long-term average after recent Q4 high

42. Rate of growth in NI & UK new orders accelerates
while pace of expansion eases for RoI firms

43. French & Italian manufacturing output growth at a
6-year high with Greece still contracting

44. Sterling weakness exacerbating input cost inflation in
NI & UK relative to elsewhere

45. Input cost inflation hits a record high in Q1 with firms
also raising prices at a record rate. Some easing in April

46. NI & UK manufacturing firms report similar rates of
growth in employment but well below those of the RoI

47. Output and new orders growth rates across NI’s
services sector accelerates over the last 3 months

48. NI & UK’s services sector output growth accelerates
in April but still lags behind the RoI

49. The growth rate in NI’s services sector remains relatively
subdued & well below its pre-downturn long-term average

50. New orders growth rate plateaus for NI services
firms and still lags well behind RoI and UK

51. Input cost inflation accelerates to a near 6-year high
with output prices inflation more subdued

52. NI & UK firms report similar rates of service sector
jobs growth but lagging well behind the RoI

53. NI retailers are still recruiting staff at a significant
rate with sales and orders growth slowing rapidly

54. NI retailers report elevated rates of input cost inflation
while output price inflation hits a record high in Q1

55. NI’s construction firms increasing their staffing
levels but new orders are contracting again

56. Input cost inflation remains high with firms increasing
prices at a much weaker rate

57. NI firms report their 2nd consecutive month of growth in
March but stagnation in April

58. NI firms report falling orders whilst growth continues
(albeit slowing) for UK & RoI firms

59. UK firms report increased activity for civil engineering
& housing but commercial activity slows

60. Construction sector still reporting a shortage of
sub-contractors

61. Optimism amongst UK construction firms is broadly
in line with its long-term average

62. RoI housing and commercial construction activity has
been improving while engineering output stagnates

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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