ulster bank ni pmi december 2015 slidepack

Ulster Bank Northern Ireland Purchasing Managers Index (PMI)

Includes analysis of Global, Eurozone, UK, UK Regions, NI & Republic of Ireland economic performance by sector

December 2015 Survey Update

Issued 11th January 2016

Richard RamseyChief Economist Northern Ireland

www.ulstereconomix.comrichard.ramsey@ulsterbankcm.com

Twitter @UB_Economics

PMI SurveysPurchasing 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.

Global output growth eases to a 12-month low with both services & manufacturing slowing in December

Composite PMIs for China & the US (Markit PMI not ISM) both posted notable declines in December

Developed Markets PMI slips to an 11-month low (53.8) but continues to outperform Emerging Markets (49.5)

Emerging Markets PMI back below 50 but only just. India, bucks the wider trend being followed by its fellow BRICS

Chinese Composite PMI back below 50 and at a 21-month low with slowdown spreading to services (17-mth low)

Australia’s services sector hits a 13-month low while manufacturing eases from its recent 25-month high

Italy posts its highest reading since February 2011 with France slipping to an 11-month low

EZ manufacturing & services continue to post output growth but retail & construction activity still contracting

The Eurozone composite PMI signals a loss of momentum in Q3 but some improvement in Q4

The Republic of Ireland, Germany, the UK & Italy posted the fastest rates of service sector output growth

Manufacturing activity picked-up in EZ, with Japan maintaining its growth rate. US & China still contracting

Developed Markets continue to outperform Emerging Markets in terms of manufacturing

UK & RoI manufacturing output growth still ranks higher than most with NI in the bottom half of the table

UK, NI and RoI firms all report an easing in their respective rates of business growth in December

PMI suggests growth in DFP’s private sector composite index during 2014 but recovery stalls in Q1-15 with a modest rebound in Q2 to Q4

2014 was the 1st year in 7 years that the 4 main indicators recorded expansion, repeated in 2015 but growth slowed

New orders growth slows in Q4 but output growth rate maintained with exports & jobs growth accelerating

NI firms reported an easing in the rate of output & jobs growth in December but a slight pick-up in orders growth

NI firms report a pick-up in new orders growth in December but still lag way behind the UK & RoI

Backlogs of work continue to grow amongst RoI firms with levels of outstanding work for NI & UK firms flat

Northern Ireland export orders rebound in December

RoI jobs growth continues but eases to a 23-month low. Employment growth for NI & UK eases slightly

PMI signalled a slowdown in jobs growth in H2-14 but employment growth has accelerated since then

Input cost inflation hit its highest rate for the year in December with output prices broadly flat

Regional Comparisons

All UK regions end 2015 in expansion mode but only just for Scotland

All UK regions posted growth in Q4 with Scotland’s growth rate marginal. NI still lagging behind the UK

The RoI reported the fastest rate of growth in business activity in 2015 with NI & Scotland the slowest

Scotland posts a fall in employment levels in December with NI’s rate of job creation broadly in line with the UK

Scotland and the North East post the weakest rates of job creation within the UK in Q4

Scotland, the North East & NI posted the weakest rates of jobs growth over the last year with the RoI the strongest

SectoralComparisons

UK construction industry was the only sector to post an acceleration in output growth in December

The UK’s growth rate in Q3 moderated in line with the PMI to 0.4% q/q. A slight improvement is expected in Q4

Manufacturing & construction output growth picks up in December while services activity slows from recent high

Retail & construction posted stronger rates of growth in H2 than H1 while services held steady & manufacturing slowed

NI manufacturing output flat, services output slowing but construction firms post a pick-up in output growth

Jobs growth within the services & construction sectors accelerates while manufacturing industry is losing jobs

NI’s manufacturing firms report a rebound in output & orders in December but pace of job losses accelerates

RoI & NI firms post a sharp slowdown in output growth in Q4 with UK firms recording a pick-up in activity

NI firms report a marked divergence in manufacturing orders growth than their equivalents in the UK & RoI

All economies saw an acceleration in output growth in December with Greece & NI back above 50

Higher wage costs are driving input costs higher with output price deflation continuing

NI manufacturing firms now reporting job losses at their fastest pace in 2½ years. UK & RoI are still creating jobs

NI PMI signals moderation in jobs growth in H2-14 & Q1-15 following record high in Q2-14. Job losses apparent in Q4

NI services sector experiences a pick-up in new orders & employment growth but output growth eases

NI diverges from the UK & RoI with firms reporting a slowdown in service sector output growth

The rate of growth in NI’s services sector slows and remains well below the pre-downturn long-term average

RoI firms still report very strong rates of new orders growth whilst growth amongst NI & UK firms lags behind

Input cost & output price inflation accelerate with output prices rising at their fastest rate since Sept-08

NI firms report a marked acceleration in jobs growth in Q4 which is now in line with the UK but well below RoI

Pace of job creation within services sector eased in H2-14 but has picked up and accelerated throughout 2015

NI retailers report a modest fall in sales and a notable decline in orders but pace of jobs growth accelerates

NI retailers report output price deflation with output prices recently falling at their fastest rate since June 2009

NI’s construction firms report rising rates of output, orders & employment growth but activity largely linked to GB

Input cost inflation remains subdued as local firms continue to enjoy pricing power

NI’s construction PMI posts jobs growth Q3-13 to Q4-15 with a dip in employment in Q3-15

UK & RoI firms reporting strong rates of output growth with NI firms catching up

New orders growth accelerating in the UK, RoI and NI

UK firms report a slowdown in the rate of growth in civil engineering & housing activity with commercial holding up

UK sub-contractors remain in short-supply with rates charged still rising albeit the pace of change is slowing

Optimism amongst UK construction firms remains high

All aspects of RoI construction activity have reported a pick-up in their growth rates in recent months

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

RoI construction firms still remain very optimistic about the year ahead

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