PMI Chartpack - Includes 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 2019 Survey Update
Issued 10th
June 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 50.1 (79-mth low)
• Developed Markets’ PMI slips to a 77-mth low of 51.1
• Emerging Markets’ PMI hits 7-mth low due to China, Russia & Brazil
• US composite PMI slows to a 3-yr low of 50.9
• Chinese composite PMI slows to 51.5 (3-mth low)
• Growth slows in China, US, Japan, Brazil, Russia, Spain & Ireland
• 13 out of 30 countries now in manufacturing downturns (incl. Germany,
Canada, Italy, Poland, Malaysia, Turkey, UK & the Czech Republic)
• Global manufacturing export orders fall for 9th
month in a row
• EZ composite pick-up to 51.8 due to improvements in Germany (52.6)
& France (51.2) but Italy flat & Spain hits a 66-mth low of 52.1
• Ireland slipped to a 71-mth low for output & a 6-yr low for orders
• UK composite PMI (incl. construction) eases slightly from April’s 50.9 to
50.7 in May. Only the services sector remains in expansion mode
May 2019 Global PMIs – Key highlights

4. • Private sector growth fell for the 3rd
month running (46.0)
• All sectors posted a decline in output for the first time in 6 years
• Export orders (41.4) fall at their fastest pace since Nov-12
• Employment falls for fifth month running (47.8)
• Input cost inflation eases to a 37-mth low
• Services firms’ order books shrink at fastest rate since Jan-13
• Retail sales fall at their fastest pace in 7 years (37.7)
• Manufacturing output falls at steepest rate since Dec-12
• Manufacturing orders decline at fastest pace in 81-mths
• Construction notches up its 9th successive month of falling orders
• NI posted the sharpest falls in output & orders 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
May 2019 Northern Ireland PMI – Key highlights

5. Global output growth approaches a 3-yr low with
manufacturing almost stalling at a 79-mth low of 50.1

6. China & the US post notable slowdowns in activity in May
while growth remains weak in the EZ, Japan & the UK

7. Emerging Markets PMI remains above its Developed
Markets’ equivalent which eases to a 77-mth low

8. Emerging Markets PMI eases to a 7-mth low with slower
rates of growth in China, Russia & Brazil (contracting)

9. Chinese manufacturing & services activity slow in May

10. Pace of growth slows for Spain (66-mth low) with Italy
broadly flat. Germany, France & Ireland improve

11. EZ services growth pick-up slightly while construction
activity slows and 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 31-mth low with subdued
performance for Japan & China and EZ contracting

15. Modest rates of manufacturing growth for Emerging
Markets with Developed Markets at a 77-mth low

16. RoI sees its growth rate slow to a 71-mth low. UK maintains
marginal growth while NI’s contraction continues

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 firms see orders growth stagnate while NI’s
contraction continues. 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
November 2012 (78-mths)

24. NI’s private sector shedding jobs for 5th month running
but the pace of decline eases in May

25. NI’s firms in hiring mode in 2018 but the PMI suggests
2019 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 May

29. The North West tops the regional growth table for the
last 3 mths with NI at the other end of the table

30. The East Midlands posts the fastest rates of output
over the last 12-months with NI ranked ninth

31. NI’s private sector is 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 six regions to report falling employment
levels in the 3 months to May 2019

34. The North West tops the jobs growth table with the
North East (job losses) at the bottom

35. Sectoral
Comparisons

36. UK services & manufacturing output growth in May but
latter slows to 34-mth low. Construction output
contracts

37. UK GDP growth in Q1 2019 (+0.5% q/q) much stronger
than PMI was indicating. Expect weaker growth in Q2

38. RoI output growth slows in manufacturing &
construction

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

40. Slowdown evident across all sectors with notable
deterioration in retail

41. Pace of hiring continues within construction (but only
just) with manufacturing & services shedding jobs

42. Input cost inflationary pressures easing outside of
construction

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

44. NI manufacturers report a slowdown in business
conditions

45. Manufacturing output growth amongst NI & RoI firms
has slowed dramatically while UK growth continues

46. NI manufacturing output growth contracts

47. New orders growth slows for RoI & UK firms while NI
firms report contraction

48. Apart from Greece, stagnation / contraction is the
name of the game for manufacturing output

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

50. Manufacturing inflationary pressures ease

51. NI, UK & RoI manufacturing firms are all 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. NI & UK firms report a fall in new orders while the
RoI’s growth rate continues to slow

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 shedding jobs at a rapid rate

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

59. NI retailers feeling the squeeze on profit margins

60. NI’s construction firms report fall in output and new
orders but continued growth (marginal) in staffing levels

61. Input cost inflation remains elevated with pricing
power waning

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

63. RoI firms report continued growth in new orders while UK
dips into contraction territory & NI firms post further declines

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

65. Only housing activity remains in growth mode with civil
engineering & commercial stuck in contraction territory

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 & commercial activity growth slows while
engineering activity remains in contraction mode

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

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

71. Slide 71
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