Ulster Bank Northern Ireland Purchasing Managers Index (PMI) Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector August 2013 Survey Update Issued 9 th September 2013 Richard Ramsey Chief Economist Northern Ireland [email protected]
Slides illustrating data from the Ulster Bank Northern Ireland PMI for August 2013, 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
NI, UK & the RoI all post strong rates of growth in August. NI firms record their fastest rate of growth since March 2007
Private Sector Business Activity - PMIs
30
35
40
45
50
55
60
65
Aug-04 Feb-06 Aug-07 Feb-09 Aug-10 Feb-12 Aug-13
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 Q2/Q3 2013
*QES is DFP's official Quarterly Employment Survey of the number of jobs in NI & includes the public sector
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages except * average of July & August
Firms within the UK, RoI & NI all post strong employment gains in August
*QES is DFP's official Quarterly Employment Survey of the number of jobs in NI firms
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages except * average of July & August
Recent growth in NI service sector output / orders is feeding through into higher levels of employment…
NI Service Sector (excludes Retail)3 month moving average
30
35
40
45
50
55
60
65
70
Aug-04 Feb-06 Aug-07 Feb-09 Aug-10 Feb-12 Aug-13
Business activity New Orders Employment
Source: Markit Economics & Ulster Bank NI
Grow
th acceleratingC
ontraction accelerating
In July, all three economies post output growth for the first time since 2007. Growth accelerates in August…
Services Output 3 month moving average
30
35
40
45
50
55
60
65
70
Aug-04 Feb-06 Aug-07 Feb-09 Aug-10 Feb-12 Aug-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI
Contraction
Expansion
… and strong new orders growth in the same three economies
Services New Orders (excluding Retail ) 3 month moving average
30
40
50
60
70
Aug-04 Feb-06 Aug-07 Feb-09 Aug-10 Feb-12 Aug-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
NI’s services sector sees inflationary pressures ease
NI Services Input & Output Inflation3 month moving average
30
40
50
60
70
80
Aug-04 Feb-06 Aug-07 Feb-09 Aug-10 Feb-12 Aug-13
No Change Input Costs Output Prices
InflationD
eflation
Source: Markit Economics & Ulster Bank NI PMI
Profits squeeze
…with employment levels picking up in July & August in N.Ireland
Services Employment3 month moving average
30
35
40
45
50
55
60
65
Aug-04 Feb-06 Aug-07 Feb-09 Aug-10 Feb-12 Aug-13
UK RoI NI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
The services PMI finally shows employment growth after 5 years of decline
*QES is DFP's official Quarterly Employment Survey of the number of jobs in NI and includes the public sector
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages except * average of July & August
Retailers experience a retail boom in July & August
Northern Ireland Retail PMI3 monthly average
25
35
45
55
65
75
Aug-04 Feb-06 Aug-07 Feb-09 Aug-10 Feb-12 Aug-13
Business Activity New Orders Backlogs No Change
Source: Markit Economics & Ulster Bank NI PMI
Expansion
Contraction
Profits squeeze on local retailers eases significantly due to increased pricing power
NI Retail Input & Output Inflation3 month moving average
30
40
50
60
70
80
90
Aug-04 Feb-06 Aug-07 Feb-09 Aug-10 Feb-12 Aug-13
Input Costs Output Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI
Profits squeeze
NI construction sector still reports growth in output and orders. But employment dips in August
NI Construction PMI3 month moving average
20
30
40
50
60
Feb-09 Nov-09 Aug-10 May-11 Feb-12 Nov-12 Aug-13
Output New Orders Employment
Source: Markit Economics, Ulster Bank PMI
ExpansionC
ontraction
50 = No change
…but the profits squeeze continues
NI Construction Sector Profits Squeeze3 month moving average
20
30
40
50
60
70
Feb-09 Nov-09 Aug-10 May-11 Feb-12 Nov-12 Aug-13
PMI IndexInput Prices Output Prices No Change
Source: Markit Economics & Ulster Bank PMI
InflationD
eflation
NI PMI has been a reasonably good predictor of actual job losses in the official employment surveys (QES)
*QES is NI's official Quarterly Employment Survey of the no. of jobs in NI firms
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages except * average of July & August
UK (59.1) & NI (51.9) construction sectors post healthy rates of growth in August. With RoI almost flat (49.7)
Construction Sector Output - PMI3 month moving average
20
30
40
50
60
Feb-09 Nov-09 Aug-10 May-11 Feb-12 Nov-12 Aug-13
PMI Index
NI UK RoI
Source: Markit Economics
ExpansionC
ontraction
New orders in the UK & NI have been rising over the last 3 months but NI posts a dip in August (47.5)
Construction Sector New Orders - PMI3 month moving average
20
30
40
50
60
Feb-09 Nov-09 Aug-10 May-11 Feb-12 Nov-12 Aug-13
PMI Index
NI UK RoI
Source: Markit Economics
ExpansionC
ontraction
Growth opportunities for NI firms within GB market particularly within the house building sector…
UK Construction Activity - PMIs3 month moving average
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