The Ulster Bank Northern Ireland Purchasing Managers Index (PMI) for October 2016 highlights economic performance across various sectors in Northern Ireland, the Republic of Ireland, the UK, and globally. While Northern Ireland experienced modest output growth, it lagged behind the UK, indicating stagnant order growth and declining job creation. Overall, the survey reflects a mixed economic outlook, with some sectors in growth while others, such as construction and services, show contraction.

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 2016 Survey Update
Issued 15th November 2016
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 hits an 11-month high

4. US Markit composite PMI posts its best reading of the
year with improvements in other economies too

5. Developed & Emerging Markets’ PMIs improving with
the latter at a 20-month high

6. Emerging Markets’ PMI remains in growth mode with
India reporting a marked improvement in October

7. Chinese services & manufacturing PMIs both pick-up in
October with manufacturing at a 2½-year high

8. Australia’s services & manufacturing PMIs both
return to growth

9. Italy, France & Ireland signal a slowdown in their growth
rates with UK, Germany & Spain posting a pick-up

10. EZ manufacturing & services output growth quickens.
But retail & construction are both in contraction mode

11. GDP remained stuck in a low gear in Q2 & Q3 but
PMI signals more momentum in Q4*

12. US overtakes Ireland to post the fastest rate of output
growth in services with Brazil in a league of its own

13. All major economies report an improvement in
manufacturing conditions

14. Developed Markets still outperform Emerging Markets

15. NI firms report a modest pick-up in output growth with
the RoI economy slowing fast & overtaken by the UK

16. PMI suggests private sector growth stalls in Q3 but recovers in
Q4*

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

18. Output & orders fall in Q3* with pace of job creation
easing. £ weakness boosts growth in exports in Q3 / Q4*

19. NI firms report a return to growth in output but new
orders growth stagnant & jobs growth slowing

20. UK firms report a marked pick-up in new orders growth
while RoI growth slows and NI order books remain flat

21. RoI firms report rising backlogs while UK & NI firms
post stagnation and declines respectively

22. NI export orders rise at a near record rate with £
weakness cited as a factor behind growth in RoI demand

23. RoI jobs growth accelerates while NI and UK report
lower rates of employment creation

24. Input cost inflation accelerates to a 65-month high
in October with output price inflation less marked

25. Regional
Comparisons

26. The North West tops the regional growth table in October
with Scotland at the foot of the regional league table

27. Scotland, NI & the North East post the weakest growth
rates of all the UK regions over the last 3 months

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

29. NI reports the 3rd slowest rate of job creation in the UK
with London reporting no change in staffing levels

30. NI posts the 3rd fastest rate of employment growth of
all UK regions over the last 3 months

31. Scotland & the North East (job losses) were the only
2 regions not to post growth over the last 12 months

32. Sectoral
Comparisons

33. Post-Brexit vote pessimism appears to have been and
gone but will it return?

34. The UK’s growth rate remained relatively strong in
Q3 at 0.5% q/q which was firmer than PMI suggested

35. Services was the only sector in the RoI to report a
slowdown in growth

36. NI retailers & manufacturing firms in growth mode in
Q4* while services weak & construction in rapid decline

37. Services sector’s output growth stagnates with
construction contracting & manufacturing recovering

38. Divergence: the rate of job losses accelerates for
construction with manufacturing & services expanding

39. NI’s manufacturing firms report a marked pick-up in
activity but new orders and employment flat

40. UK manufacturing output growth accelerates
markedly with both UK & NI outperforming the RoI

41. NI manufacturing output growth just below pre-
downturn long-term average

42. UK businesses reporting a marked pick-up in demand
but NI manufacturing orders’ growth is flat

43. NI manufacturing firms bucking the wider trend of
slower growth within the Eurozone

44. Input cost inflation rockets to a 99-month high in
October with firms raising prices at a weaker rate

45. NI’s manufacturing firms reporting a ‘V-shaped recovery’
in employment growth & outperforming the UK & RoI

46. All key indicators across NI’s services sector point
to low growth / stagnation

47. UK services sector output rebounds in the UK but slows
markedly in the RoI. NI output remains broadly flat

48. The rate of growth in NI’s services sector is broadly
flat and well below its pre-downturn long-term average

49. New orders dry up for NI but UK firms report a marked
pick-up. RoI firms reporting a slowdown in growth

50. Input cost inflation accelerates to a 33-month high
with output prices increasing at a much weaker rate

51. NI & UK firms report muted rates of service sector
jobs growth with RoI’s rate still strong albeit slowing

52. NI retailers are still recruiting staff at a significant rate
with sales and orders growth accelerating

53. NI retailers report a marked acceleration in input cost
inflation while output price rises pick-up too

54. NI’s construction firms posting a contraction in all
key indicators

55. Input cost inflation accelerating at a rapid rate with
firms increasing prices at a much weaker rate

56. NI firms report a sharp decline in output over the last 3
months in contrast to growth amongst UK & RoI firms

57. NI firms continue to post a slump in new orders growth in
contrast to robust growth amongst RoI firms

58. UK firms report an improvement in conditions
across housing and civil engineering activity

59. Slowdown in construction sector briefly led to an
increase in supply of sub-contractors

60. Optimism amongst UK construction firms remains
below its long-term average

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

62. RoI’s construction industry still reporting a decrease in
the availability of sub-contractors & rising rates of pay

63. RoI construction firms still remain very optimistic about
the year ahead and well above the long-term average

64. Slide 64
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