Ulster Bank Northern Ireland Purchasing Managers Index (PMI) Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector January 2015 Survey Update Issued 9 th February 2015 Richard Ramsey Chief Economist Northern Ireland www.ulstereconomix.com [email protected]Twitter @UB_Economics
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Slide pack , Ulster Bank Northern Ireland PMI, January 2015
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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
Australia’s services & manufacturing sectors remain ‘Down Under’ the 50 threshold in January
Australia - PMI
30
35
40
45
50
55
60
65
Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Manufacturing Services No Change
Source: Markit Economics PMIs
Contraction
Expansion
NI records its 2nd consecutive month of contraction as it continues to diverge from the UK & RoI
Private Sector Business Activity - PMIs
30
35
40
45
50
55
60
65
Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
NI UK RoI
Source: Markit & Ulster Bank NI PMI50 = threshold between expansion / contraction
ExpansionC
ontraction
**PMI Surveys Exclude Agriculture & Public Sector**
PMI suggests growth in DFP’s private sector composite index (combines indices for construction, services, agriculture & industrial production) throughout 2014
NI Private Sector Output Index Versus NI PMI
-6-5-4
-3-2-1012
345
2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1 2015 Q1*
NICEI Q/Q%
30
35
40
45
50
55
60
65
PMI NICEI Left Hand Scale PMI Right Hand Scale
Source: DFP NI Composite Economic Index (NICEI) & Ulster Bank / Markit Economics NI PMI,Q2 2014 is latest data for NICEI. *Q1 refers to Jan-15 only
50 mark is the threshold for expansion / contraction with PMI Expansion
ContractionE i
2014 was the first year in 7 years that business activity, new orders, employment & export orders all expanded
NI Private Sector Performance (PMI)
30
35
40
45
50
55
60
2007 2008 2009 2010 2011 2012 2013 2014
PMI Index
Business Activity New Orders Employment Export Orders ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI
NI’s recovery took hold in H2 of 2013 with all indicators improving in H1 2014 but easing in H2 2014
NI Private Sector Performance (PMI)
30
35
40
45
50
55
60
65
2006
H220
07H1
2007
H220
08H1
2008
H220
09H1
2009
H220
10H1
2010
H220
11H1
2011
H220
12H1
2012
H220
13H1
2013
H220
14H1
2014
H2
PMI Index
Business Activity New Orders Employment Export Orders
ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
NI has started 2015 on a negative note with output, orders & employment for the first time since May 2013
NI Private Sector ActivityMonthly
30
35
40
45
50
55
60
65
70
Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Business Activity New Business Employment
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
Incoming orders for NI firms slump in H2 with Jan-15 marking the first contraction (on a monthly basis) in 20 months
Private Sector New Orders3 month moving average
30
35
40
45
50
55
60
65
Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
NI UK RoI
Source: Markit Economics & Ulster Bank NI
Orders increasing
Orders C
ontracting
Backlogs of work continue to grow in the UK & RoI but NI posts a 4th month of contraction as activity slows
Private Sector Backlogs3 month moving average
30
35
40
45
50
55
60
Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Increasing D
ecreasing
Export orders flat or falling in each of the last 3 months
NI New Export BusinessMonthly
20
30
40
50
60
70
Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
New Export Orders No Change
Source: Markit Economics & Ulster Bank NI
Expansion
Contraction
PMI signals the fastest rate of jobs growth in 7 years in Q2 with the pace of job creation easing sharply since
NI Employment: PMI v QES**
35
40
45
50
55
60
2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1 2015 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. *Q1 refers to Jan-15 only
Job creation in the RoI eases from Dec-14’s record rate but NI posts its 1st month of decline in 19 months
Private Sector Employment LevelsMonthly
30
35
40
45
50
55
60
Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Job Gains
Job Losses
Inflationary pressures relatively subdued with output prices falling
NI Private Sector Profit Squeeze3 Month Moving Average
30
40
50
60
70
80
Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Output Prices Input Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI PMI
Profits squeeze
Price of goods & services
Regional Comparisons
Scotland joins NI as the only two UK regions to see a contraction in output in January
Output / Business ActivityJanuary 201550 = No change
47.748.0
60.3
56.9
40
45
50
55
60
65
Lon WM Wal SW East UK NW SE NE Y&H EM NI Scot RoI
PMI Index
ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
Most of the UK regions & the RoI posted strong rates of growth but NI is at the foot of regional league table
Output / Business Activity 3 months to January 2015
50 = No change
56.7
60.5
50.1
40
45
50
55
60
65
Wal Lon WM SE East UK NE SW Y&H EM NW Scot NI RoI
PMI Index
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
The RoI reported the fastest rate of growth in business activity over the last 12 months & Scotland the slowest
Output / Business Activity12 months to January 2015
50 = No change
56.3
58.1
59.9
44
47
50
53
56
59
62
65
NE Wal Lon SE East WM UK EM Y&H NW SW NI Scot RoI
PMI Index
ExpansionC
ontractionSource: Markit Economics & Ulster Bank NI PMI
NI posts its 1st contraction in employment since Jun-13. London & the RoI report the strongest rates of growth
Employment LevelsJanuary 2015
50 = No change
49.5
58.3
56.6
46
48
50
52
54
56
58
60
Lon WM East UK NW Y&H SE SW Wal EM NE Scot NI RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
NI & the North East post the weakest rates of job creation within the UK over the last 3 months
Employment Levels3 months to January 2015
50 = No change
55.8
50.4
59.1
46
48
50
52
54
56
58
60
East WM Lon Y&H UK Wal SE NW SW EM Scot NE NI RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
NI & the North East posted the weakest rates of jobs growth over the last year with the RoI reporting the strongest rates
Employment Levels 12 months to January 2015
50 = No change
56
53.4
57.8
46
48
50
52
54
56
58
60
East Y&H NW UK Lon SE WM SW EM Wal Scot NI NE RoI
PMI Index
IncreasingD
ecreasingSource: Markit Economics & Ulster Bank NI PMI
Sectoral Comparisons
All three UK sectors report an acceleration in output growth in January
UK Business Activity / Output - PMIs
20
30
40
50
60
70
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Services Manufacturing Construction
Source: Markit Economics
ExpansionC
ontraction
UK posts strong rates of economic growth between Q1-13 & Q3-14 with growth easing in Q4-14
UK GDP versus UK Composite PMIUK Composite includes Construction
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