Ulster Bank Northern Ireland Purchasing Managers Index (PMI) September 2020 - Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector. September 2020 Survey Update

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
September 2020 Survey Update
Issued 12th October 2020
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. September 2020 Northern Ireland PMI – Key highlights

4. • Global output growth slows (52.1) as new virus case number rise
• Global manufacturing (53.5) & services output (51.6) growth both slows
• Emerging Markets Composite records strongest growth since May-11
• US & Chinese composite PMIs see rates of growth ease while
Eurozone recovery is close to stalling & Japan remains in contraction
India, China, Brazil & Russia all reported robust expansions
• Chinese manufacturing output eases from August’s 9½-year high (54.2)
• Composites for France (48.5) & Spain (44.3) show contraction with
Germany (54.7) & Italy (50.4) faring better
• UK composite PMI (56.6) slips from its recent 6-year high but growth
compares favourably with its international peers
• The UK’s services sector was the top international performer
• RoI’s composite PMI fell into contraction (46.1) with services (45.8),
manufacturing (48.4) & construction (47.0) all posted falls in output
• All 12 UK regions report output growth
September 2020 Global PMIs – highlights

5. • All of the headline indicators improved relative to August
• Output growth accelerates marginally from 51.7 in August to 51.9
• New orders stabilise (49.7) following August’s significant fall (45.1)
• Pace of job losses remains sharp (42.5)
• Export orders still falling at a rapid pace (37.7)
• Firms raise prices for only the second time in seven months
• Services output (54.9) accelerates to a 26 month high
• Manufacturing (48.5) posts first decline in output in four months
while growth returns to construction (55.7) & retail (50.9)
• Construction orders rise at fastest pace since February 2016
• Services (53.6) & Construction (52.5) expect output growth in 12
months time while manufacturing & retail expect output to fall
• NI had the third slowest rate of output growth in the UK
• NI firms remain the most pessimistic UK region for the year ahead
September 2020 Northern Ireland PMI – Key highlights

6. Slight moderation in rates of growth in global
manufacturing (53.5) and services (51.6) output

7. US & China see rates of growth ease while the
Eurozone recovery stalls. Japan remains in contraction

8. Emerging Markets’ (53.7) posts its fastest rate of growth
since May 2011. Developed Markets’ eases to (51.9)

9. Brazil, Russia and China see rates of growth ease while
India returns to growth for the first time in 6 months

10. Chinese manufacturing output growth (54.2) eases from
August’s 9½-year high but services accelerates to 54.8

11. France, Spain & the RoI see a contraction in September
with only Germany posting a respectable growth rate

12. Manufacturing output growth quickens to a 31 month
high while services joins construction in contraction

13. The UK & NI post the fastest rates of growth in services
activity with Spain & Ireland posting the steepest declines

14. EZ manufacturing growth accelerates eases while activity
in China & the US slows. Japan’s contraction continues

15. Developed Markets’ & Emerging Markets’ manufacturing
PMIs witness an acceleration in growth

16. UK’s growth rate slows (56.6) but remains strong. While
NI’s pace of expansion quickens but remains weak

17. NI composite economic index falls at a record pace in Q1 & again
in Q2 but PMI signals recovery begins in Q3

18. 2020 has seen business conditions deteriorate at record rates

19. Recovery in output begins in Q3 following Q2’s record
rate of decline but other indicators still contracting

20. Output growth picks-up marginally, new orders
stabilised but job losses continue

21. UK output growth eases while the RoI’s order books
contract. NI firms see demand stabilise

22. Pace of decline in backlogs eases for UK, RoI & NI firms

23. NI export orders slump continues

24. Job losses continue with the pace of decline
remaining steep across all three economies

25. Private sector employment declines in Q2 but PMI
signals big falls in Q1, Q2 & Q3

26. Input cost inflationary pressures have picked up in
recent months while prices charged are falling

27. Regional
Comparisons

28. All UK regions post output growth in September but
the Rep. of Ireland returns to contraction

29. All regions posted growth in Q3 but the devolved
regions of the UK lagging behind England

30. NI posts the fastest rate of output growth decline over
the last 12 months

31. NI remains the least optimistic / most pessimistic
about the future than any other UK region

32. All 12 regions posted significant job losses in September

33. NI firms’ job losses less marked than most other regions

34. All regions post job losses over the last 12 months

35. Sectoral
Comparisons

36. UK services and manufacturing output growth eases
while construction’s rate of expansion accelerates

37. All three sectors post a fall in output in September

38. NI’s private sector ends the decade the way it
began… with all sectors in contraction mode

39. All sectors post growth during Q3

40. Services joins (only just) manufacturing and
construction in expansion territory

41. Rate of job losses remains sharp (3mmov.ave) across
all sectors

42. Input cost inflationary pressures accelerating for
construction and manufacturing but eases for retail

43. Pricing power remains weak with discounting amongst
manufacturers and services firms

44. NI manufacturers reporting a pick-up in demand but
pace of employment cuts remains significant

45. Strong growth in manufacturing output in Q3 is
evident across all economies

46. NI manufacturing output recovery continues in Q3
though output drops in September

47. NI manufacturing continues to lag behind its UK & RoI
peers in terms of new orders growth

48. RoI and NI manufacturers outperformed their peers
in August but underperform in September

49. NI manufacturers report an acceleration in input cost
inflation and more marked than the UK & Global PMIs

50. Manufacturing firms’ pricing power slumps squeezing
profitability further as cost pressures intensify

51. NI, UK & RoI manufacturers are still shedding staff at
significant rates

52. NI services contraction evident across employment, &
orders. Marginal output growth (3 month average)

53. NI & RoI service sectors continue to lag behind the UK
in terms of output growth

54. NI’s services sector records marginal growth in Q3
(though respectable growth in September)

55. Service sector order books filling up in the UK but RoI
and NI are lagging behind

56. Service sector experiencing a divergence in input costs
(rising) and output prices (falling)

57. All economies posting sharp rates of decline in
services employment in Q3

58. Retail sales and orders have seen some recovery but
significant job losses continue

59. Retailers experiencing a profit squeeze

60. NI’s construction output rebounds in Q3 but staffing
levels and orders still contracting

61. Construction firms’ pricing power remains very weak
in the face of rising input costs

62. RoI construction activity lagging behind NI and the UK

63. UK construction orders rise in Q3 with RoI flat and NI
contracting

64. NI construction firms becoming more optimistic

65. House building is leading the construction recovery

66. Construction sector’s availability of sub-contractors falls
with rates charged moving in the opposite direction

67. Optimism amongst UK construction firms slumped in April
matching October 2008’s record low on the rise since

68. All aspects of RoI construction activity contract in
August & September

69. September sees a modest rise in the availability of
sub-contractors & rates charged

70. RoI construction firms becoming pessimistic

71. Slide 71
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