Ulster Bank Northern Ireland Purchasing Managers Index (PMI) Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector February 2014 Survey Update Issued 10 th March 2014 Richard Ramsey Chief Economist Northern Ireland [email protected]Twitter @UB_Economics
Slide pack for the Ulster Bank NI PMI February 2014, including analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector
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Ulster Bank Northern Ireland Purchasing Managers Index (PMI)
Includes analysis of Global, Eurozone, UK, UK Regions, NI &
Republic of Ireland economic performance by sector
The UK, NI & RoI see growth rates ease in February but the rates of growth still remain very strong
Private Sector Business Activity - PMIs
30
35
40
45
50
55
60
65
Feb-04 Oct-05 Jun-07 Feb-09 Oct-10 Jun-12 Feb-14
NI UK RoI
Source: Markit & Ulster Bank NI PMI50 = threshold between expansion / contraction
Expansion
Contraction
**PMI Surveys Exclude Agriculture & Public Sector**
PMI suggests growth in DFP’s new private sector composite index (combines indices for construction, services, agriculture & industrial production) in Q4 & Q1-14
Source: New DFP Northern Ireland Composite Economic Index (NICEI) & Ulster Bank / Markit Economics NI PMI, * refers to average of Jan-14 & Feb-14 for PMI
50 mark is the threshold for expansion / contraction with PMI
Expansion
Contraction
NI’s recovery took hold in the second half (H2) of 2013
NI Private Sector Performance (PMI)
30
35
40
45
50
55
60
2007
H120
07H2
2008
H120
08H2
2009
H120
09H2
2010
H120
10H2
2011
H120
11H2
2012
H120
12H2
2013
H120
13H2
PMI Index
Business Activity New Orders Employment Export Orders ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI
NI firms reporting an easing in rates of growth from multi-year / survey highs in employment, output & orders
NI Private Sector ActivityMonthly
30
35
40
45
50
55
60
65
70
Feb-04 Oct-05 Jun-07 Feb-09 Oct-10 Jun-12 Feb-14
Business Activity New Business Employment
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
Buoyant order books suggest more growth in the months ahead. But pace of growth is slowing from a strong position
Private Sector New OrdersMonthly
30
35
40
45
50
55
60
65
Feb-04 Oct-05 Jun-07 Feb-09 Oct-10 Jun-12 Feb-14
NI UK RoI
Source: Markit Economics & Ulster Bank NI
Orders increasing
Orders C
ontracting
Surge in demand has led to backlogs of work particularly within the UK & NI
Private Sector Backlogs3 month moving average
30
35
40
45
50
55
60
Feb-04 Oct-05 Jun-07 Feb-09 Oct-10 Jun-12 Feb-14
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Increasing D
ecreasing
NI firms post their 8th successive rise in export orders
NI New Export Business
20
30
40
50
60
70
Feb-04 Oct-05 Jun-07 Feb-09 Oct-10 Jun-12 Feb-14
New Export Orders No Change
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
PMI underestimated QES job gains in 2012. PMI for Q3 signals fastest rate of jobs growth since Q4 2007 with even stronger growth in Q4/Q1
NI Employment: PMI v QES*
35
40
45
50
55
60
2004 Q1 2006 Q3 2009 Q1 2011 Q3 2014 Q1*
PMI Index
-1.5%
-1.3%
-1.0%
-0.8%
-0.5%
-0.3%
0.0%
0.3%
0.5%
0.8%
1.0%Q/Q
PMI Employment Index No Change QES Q/Q
*QES is DFP's official Quarterly Employment Survey of the number of jobs in NI & includes public sector
Discontinuity in QES Series
Job losses
Job gains
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * Jan-14 & Feb-14 average for PMI
UK & RoI firms saw job creation accelerate in February while NI firms saw an easing in the pace of jobs growth
Private Sector Employment LevelsMonthly
30
35
40
45
50
55
60
Feb-04 Oct-05 Jun-07 Feb-09 Oct-10 Jun-12 Feb-14
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Job Gains
Job Losses
Input & output cost inflation eases in February with output prices falling for the 1st time in 10 months
NI Private Sector Profit Squeeze3 Month Moving Average
30
40
50
60
70
80
Feb-04 Feb-06 Feb-08 Feb-10 Feb-12 Feb-14
Output Prices Input Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI PMI
Profits squeeze
Price of goods & services rising
Regional Comparisons
Strong growth across all UK regions and the RoI in February with NI mid-table in February
Output / Business ActivityFebruary 201450 = No change
58.1
55.1
58.6
40
45
50
55
60
65
70
WM SE Lon Wal SW UK East Y&H NI NW NE EM Scot RoI
PMI Index
ExpansionC
ontractionSource: Markit Economics & Ulster Bank NI PMI
…all the UK regions & the RoI post strong rates of growth over the last 3 months…
Output / Business Activity 3 months to February 2014
50 = No change
58.357.2
59.0
40
45
50
55
60
65
70
WM SW SE East UK Lon Wal NW NI NE Y&H EM Scot RoI
PMI Index
Source: Markit Economics & Ulster Bank NI PMI
Expansion
Contraction
… and over the last 12 months
Output / Business Activity12 months to February 2014
50 = No change
54.8
57.8
55.3
40
45
50
55
60
65
Lon SE NW SW UK Wal WM EM Y&H East Scot NI NE RoI
PMI Index
ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
All UK regions post jobs growth in February with the RoI posting its fastest rate of job creation since June 2006
Employment LevelsFebruary 2014
50 = No change
56.0
57.3
53.4
46
48
50
52
54
56
58
60
62
NW Lon East UK SW Y&H Scot SE NE NI WM EM Wal RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
All UK regions and the RoI post jobs growth over the last 3 months
Employment Levels3 months to February 2014
50 = No change
55.656.1
54.3
46
48
50
52
54
56
58
60
SW Lon NW UK SE East NI Y&H WM NE Scot Wal EM RoI
PMI Index
IncreasingD
ecreasingSource: Markit Economics & Ulster Bank NI PMI
In 2013 NI posted its 1st annual increase in private sector employment since 2007 with trend continuing in 2014
Employment Levels12 Months to February 2014
50 = No change
53.3
54.1
51.1
46
48
50
52
54
56
58
SW Lon WM NW East SE UK Scot Wal NE Y&H EM NI RoI
PMI Index
IncreasingD
ecreasingSource: Markit Economics & Ulster Bank NI PMI
Sectoral Comparisons
All sectors post strong growth with construction recently expanding at its fastest rate in six-and-a-half years
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