Northern Ireland PMI

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
October 2018 Survey Update
Issued 12th
November 2018
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 up from 2-yr low to 53.0 due to services
• Global manufacturing output falls to 51.9 – a 28-mth low
• Growth accelerates in US, Japan, Brazil, Russia & India
• Growth slows in EZ, Germany, UK, & China
• US composite rebounds from 8-mth low to 54.9
• China composite slips to a 28-mth low of 50.5.
• Global manufacturing export orders fall for 2nd
time in a row
• Emerging Markets PMI falls to a 15-month low of 51.4
• Emerging markets manufact. exports falls for 7th
month in a row
• Developed Markets PMI rises from a 2-yr low of 53.3 to 53.6
• EZ composite PMI eases to 25-mth low of 53.1 with Germany at a
5-mth low and Italy approaching a 5-yr low (49.3)
• EZ manufacturing PMI slips to a 26-mth low-yr low of 52.0
• RoI composite PMI (incl. construction) eases to 7-mth low of 56.0
• UK composite PMI (incl. construction) slips to a 7-mth low of 52.2
October 2018 Global PMIs – Key highlights

4. • Business & new orders growth picks up from 23-mth lows to 52.8
& 52.3 – both still below pre-downturn long-term average
• NI firms saw the 4th
fastest rate of regional growth in the UK
• Jobs growth picks up from September’s 22-mth low (51.3) to 51.9
• Input cost inflation picked up across all sectors in October
• NI firms are raising their prices at a faster rate than any UK region
• Export orders growth continued but eased to a 28-mth low (51.5)
• Manufacturing & services saw output growth accelerate
• Retail and construction posted declines in output / sales
• Retail activity posted its first fall in sales in 32 months (49.2)
• Manufacturing output & orders growth is above long-term-average
• NI business confidence slumped to a 20-mth low (series began)
• NI firms are the least optimistic of any UK region
• Construction firms expect activity to fall over the next 12 months
October 2018 Northern Ireland PMI – Key highlights

5. Global output growth edges up from September’s 2-year
low due to improvement in services

6. Slower rates of growth evident with EZ (25-mth low),
China (28-mth low) & UK (27-mth low)

7. Developed Markets PMI edges up from its 24-mth low
while Emerging Markets growth slows to a 15-mth low

8. Despite rises in India, Brazil & Russia, Emerging
Markets PMI eases to 15-mth low due to China

9. Chinese composite hits a 28-mth low driven by a
rapid slowdown in services activity

10. Italian PMI falls to its lowest level in almost 5 years
with the RoI & Germany reporting an easing in growth

11. Eurozone manufacturing output falls to a 46-mth low,
services eases to 21-mth low but construction accelerates

12. EZ PMI suggests a further easing in growth rate in Q4

13. The Republic of Ireland, Russia & France post the
fastest rates of services growth in October

14. Eurozone manufacturing PMI slips to a 26-mth low with
US ISM easing to a 6-mth low, China little changed at 50.1

15. Developed Markets’ Manufacturing PMIs slips to 23-
mth low with Emerging Markets up from 2-yr low

16. NI’s private sector reports a modest acceleration in
growth but both NI & the UK are stuck in a low gear

17. PMI more positive than Composite Index. Latter includes hefty
falls in manufacturing output due to closure of JTI plant.

18. Output growth running at a 4-yr high year-to-date
2018 with pace of new orders & jobs growth easing

19. Business activity expands at its weakest pace in 9 quarters
while export orders expand at slowest rate in 10 quarters

20. NI firms report a modest pick-up in output, orders and
employment growth

21. UK firms new orders growth slows to a 27-mth low. NI
orders growth rebounds off September’s 23-mth low

22. NI & UK firms report a decline in backlogs

23. NI firms report the weakest growth rate in export
orders since the EU-referendum (28 months)

24. NI’s private sector employment growth quickens from 22-
mth low. Both NI & UK jobs growth lags behind the RoI

25. NI’s firms in hiring mode in H1 2018 though pace of job
creation has slowed in H2

26. Squeeze on profit margins eases but remains intense

27. Regional
Comparisons

28. NI & Scotland were the only two regions not to post
slower rates of growth in October versus September

29. Wales & the East Midlands top the growth table for
the three months to October. NI ranked 9th

30. The East Midlands posts the fastest rates of growth
over the last year with the North East the slowest

31. NI’s private sector is the least optimistic about the
year ahead of all the UK regions

32. NI’s pace of job creation marginally above the UK average

33. During the last three months NI’s employment growth
rate was slightly below the UK average

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

35. Sectoral
Comparisons

36. UK services & manufacturing output growth slows to
7mth & 30mth lows while construction activity picks up

37. Following GDP growth of 0.6% q/q in Q3 the soft PMI
readings for October suggest a weaker Q4 outturn

38. RoI manufacturing & services output growth slows
to 7-mth low while construction hits a 43-mth low

39. Acceleration in NI construction activity and retail
sales in Q3 but this turns to contraction in Q4*

40. Slowdown evident across all sectors bar manufacturing

41. Pace of hiring eases significantly for construction firms
but remains above the rates of growth elsewhere

42. All sectors bar retail report an easing in input cost
inflationary pressures

43. Output price inflationary pressures ease across most
sectors

44. NI manufacturers report an improvement in business
conditions

45. Manufacturing output growth slows amongst UK & RoI
firms while NI manufacturers report a modest pick-up

46. NI manufacturing output growth (last 3 months) still
remains above its pre-downturn long-term average

47. New orders growth slows for RoI & UK manufacturers
while NI firms report a modest pick-up in rates of growth

48. NI’s manufacturing performing well against its European
peers. Italy flat & France (contracting) at a 27 month low

49. UK manufacturing inflationary pressures ease to a 28
month low

50. Squeeze on manufacturing profit margins continues
though some easing in inflationary pressures

51. Pace of job creation picking up for NI firms following
recent dip but RoI & UK manufacturing jobs growth slows

52. NI’s services sector reports a deterioration across
output and new orders in the three months to October

53. Service sector output growth eases amongst UK & NI
firms. NI & UK continue to lag the RoI

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

55. New orders growth slows within NI /UK service sector
firms and still lags well behind the RoI

56. Input cost inflation eases but service firms are still
raising prices at a significant rate

57. Pace of hiring accelerates amongst RoI & UK firms
with NI services firms posting a marginal improvement

58. Retail sales activity falls with new orders flat and
employment growth slowing

59. NI retailers feeling the squeeze on profit margins

60. NI’s construction firms report a marked deterioration
in business conditions in recent months

61. Inflationary pressures remain intense amongst NI
construction firms

62. UK, NI & RoI construction firms all report a slowdown
in rates of expansion

63. UK & RoI firms report a slowdown in orders growth with
NI’s construction sector posting a decline in new work

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

65. Slowdown in UK construction activity evident but civil
engineering activity rebounds to a 15-mth high

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

67. Optimism amongst UK construction firms approaching
a 6-year low and well below its long-run average

68. RoI commercial & housing activity growth slows while
contraction in engineering activity accelerates

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

70. RoI construction firms are the least optimistic in 62
months but still more upbeat than the long-run average

71. Slide 71
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