ulster bank ni pmi slide pack, april 2013
DESCRIPTION
Slide pack for the Ulster Bank Northern Ireland PMI, April 2013TRANSCRIPT
Ulster Bank Northern Ireland Purchasing Managers Index (PMI)
Includes analysis of Global, Eurozone, UK, UK Regions, NI &
Republic of Ireland economic performance by sector
April 2013 Survey Update
Issued 13th
May 2013
Richard Ramsey
Chief Economist Northern Ireland
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 in April…
Global Output - PMI
25
30
35
40
45
50
55
60
65
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Total Manufacturing Services
Source: Markit Economics
ExpansionC
ontraction
… but all sectors within the Eurozone are still contracting
Eurozone PMIs: Output
25
30
35
40
45
50
55
60
65
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Composite (M&S) Manufacturing Services Construction
Source: Markit Economics Output Indices Expansion
Contraction
Australia, Spain & France post the steepest falls in manufacturing output. Denmark posts strongest gain
PMIs: Manufacturing Output April 2013
30 35 40 45 50 55 60 65
AustraliaSpain
FranceGreece
ItalyPoland
EZIreland
EUGermany
AustriaNI
NetherlandsCanada
SingaporeIndia
TurkeyUK
Czech RepublicChinaGlobalRussia
VietnamIsrael*
IndonesiaBrazil
TaiwanJapan
S.AfricaMexico
N.Zealand*Switzerland
USS.Korea
Denmark
Source: Markit Economics Output Indices, *March
UK, NI & RoI
Services output expanding for BRICs, US, Japan, UK & Ireland. Australia, France & Spain post the steepest declines
PMIs: Services Output April 2013
40 45 50 55 60
AustraliaFranceSpain
ItalyEZEU
GermanyNI
IndiaChinaBrazil
Emerging MarketsJapanGlobal
UKRussia
US*Ireland
Source: Markit Economics Output Indices, * US Non-manufacturing which is wider than services
€
The four largest economies within the eurozone are now contracting
Composite PMIs (Manufacturing & Services ** Excludes Construction**)
30
35
40
45
50
55
60
65
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Source: Markit Economics PMIs
Contraction
Expansion
The US & China signal a loss in momentum in April
Composite PMIs (Manufacturing & Services ** Excludes Construction**)
35
40
45
50
55
60
65
Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Eurozone US (ISM) China UK
Source: Markit Economics
ExpansionC
ontraction
… but Japan’s PMI overtakes the US and China. A depreciating yen is aiding Japanese manufacturing…
Manufacturing PMIs
25
30
35
40
45
50
55
60
65
Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
US (ISM) China Japan Eurozone
Source: Markit Economics
Contraction
Expansion
… but strong Aussie $ and a slowdown in Asia is pushing Australia ‘Down Under’
Australia - PMI
30
35
40
45
50
55
60
65
Dec-07 Aug-08 Apr-09 Dec-09 Aug-10 Apr-11 Dec-11 Aug-12 Apr-13
Manufacturing Services No Change
Source: Markit Economics PMIs
Contraction
Expansion
UK & the RoI post a pick-up in business activity in April whilst the rate of contraction remains unchanged for NI
Private Sector Business Activity - PMIs
30
35
40
45
50
55
60
65
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
NI UK RoI
Source: Markit & Ulster Bank NI PMI: 50 = threshold between expansion / contraction
Expansion
Contraction
**PMI Surveys Exclude Agriculture & Public Sector**
PMI is more negative than DFP’s new private sector composite index suggests (combines DFP indices for construction, services, agriculture & industrial production)
NI Private Sector Output Index Versus NI PMI
-5
-4
-3
-2
-1
0
1
2
3
4
5
2002 Q4 2004 Q2 2005 Q4 2007 Q2 2008 Q4 2010 Q2 2011 Q4 2013 Q2*
PSO Q/Q%
30
35
40
45
50
55
60
65PMI
NI PSO Index Left Hand Scale UB PMI Right Hand Scale
Source: New DFP Northern Ireland Composite Economic Index (NICEI) & Ulster Bank / Markit Economics NI PMI, * refers to April 2013
50 mark is the threshold for expansion / contraction with PMI
Expansion
Contraction
NI output, new orders and employment all post modest contractions over the last 3 months
NI Private Sector Activity3 month moving average
30
35
40
45
50
55
60
65
70
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
Business Activity New Business Employment
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
Pace of contraction in NI new orders continues. Rate of growth eases in RoI & accelerates in the UK
Private Sector New OrdersMonthly
30
35
40
45
50
55
60
65
Apr-03 Apr-05 Apr-07 Apr-09 Apr-11 Apr-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Orders increasing
Orders C
ontracting
NI’s levels of work outstanding sees its pace of decline ease markedly over the last 3 months
Private Sector Backlogs3 month moving average
30
35
40
45
50
55
60
Apr-03 Dec-04 Aug-06 Apr-08 Dec-09 Aug-11 Apr-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Increasing D
ecreasing
The pace of decline in export orders eases in April
NI New Export BusinessMonthly
20
25
30
35
40
45
50
55
60
65
Apr-03 Apr-05 Apr-07 Apr-09 Apr-11 Apr-13
New Export Orders No Change
Source: Markit Economics & Ulster Bank NI PMI
Grow
th AcceleratingC
ontraction Accelerating
PMI underestimated job gains in Q2 & Q3 (relative to official jobs survey) marginal job losses in Q4 2012. PMI signals a flat Q1 2013
NI Employment: PMI v QES*
35
40
45
50
55
60
Jun-03 Sep-04 Dec-05 Mar-07 Jun-08 Sep-09 Dec-10 Mar-12 Apr-13
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
Discontinuity in QES Series
Job losses
Job gains
*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 April-13 (monthly)
The UK & the RoI record further job gains in April. Conversely, firms in NI report a fall in employment levels
Private Sector Employment LevelsMonthly
30
35
40
45
50
55
60
Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Job Gains
Job Losses
Strong input cost inflation coupled with output price deflation means the profitability squeeze continues
NI Private Sector Profit Squeeze3 Month Moving Average
30
40
50
60
70
80
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
Output Prices Input Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI PMI
Profits squeeze
Price of goods & services falling
Regional Comparisons
3 UK regions post a contraction in business activity
Output / Business ActivityApril 2013
50 = No change
48.9
51.052.1
40
45
50
55
60
Wal Y&H EM Lon Scot UK SE East SW NW WM NE NI RoI
PMI index
ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
The North East posts the sharpest rate of decline over the last 3 months followed by NI…
Output / Business Activity 3 months to April 2013
50 = No change
48.7
51.3 50.9
40
42
44
46
48
50
52
54
56
Wal Y&H Lon Scot EM SE East UK NW WM SW NI NE RoI
PMI Index
Source: Markit Economics & Ulster Bank NI PMI
Expansion
Contraction
…but NI has posted the steepest decline over the last 12 months
Output / Business Activity 12 months to April 2013
50 = No change
51.551
45
40
45
50
55
Lon Y&H Wal EM Scot SE WM UK East NW SW NE NI RoI
PMI index
ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
Four English regions & NI report falling employment levels in March …
Employment LevelsApril 2013
50 = No change
50.751.0
47.3
44
46
48
50
52
54
WM SE Wal EM Scot UK East SW Lon NE NW Y&H NI RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
…and 4 UK regions (incl. NI) post job losses over last 3 months…
Employment LevelsLast 3 months to April 2013
50 = No change
48.4
50.6
51.3
44
46
48
50
52
54
WM SE Wal East EM Scot Lon UK NE SW NW NI Y&H RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
NI posts the steepest decline in employment over the last 12 months
Employment Levels12 months to April 2013
50 = No change
50.1
51.2
47.7
42
44
46
48
50
52
54
EM WM SE Scot East UK Y&H Wal Lon SW NW NE NI RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
Sectoral Comparisons
UK service sector growth accelerates in April with manufacturing back above the 50 threshold
UK Business Activity / Output - PMIs
20
30
40
50
60
70
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Services Manufacturing Construction
Source: Markit Economics
ExpansionC
ontraction
‘Triple-dip’ recession avoided. UK composite PMI for April suggests further growth in Q2
UK GDP versus UK Composite PMI
25
30
35
40
45
50
55
60
65
2006Q3
2007Q2
2008Q1
2008Q4
2009Q3
2010Q2
2011Q1
2011Q4
2012Q3
2013Q2*
PMI Index
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5GDP Q/Q
GDP Q/Q PMI PMI No Change
Source: ONS & Markit Economics, * refers to Apr-13 only
RoI’s services sector sees a pick up in growth but the rate of decline accelerates for construction & manufacturing
RoI Business Activity - PMIs3 month moving average
20
25
30
35
40
45
50
55
60
65
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Manufacturing Services Construction No Change
Source: Markit Economics
ExpansionC
ontraction
NI services & construction sectors contracting but manufacturing is growing
NI Private Sector Output 3 month moving average
30
35
40
45
50
55
60
65
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
Manufacturing Services Construction
Source: Markit Economics & Ulster Bank NI PMI
Expansion
Contraction
…with all three sectors reporting falling employment levels
NI PMI - Employment Index 3 month moving average
25
30
35
40
45
50
55
60
65
Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Manufacturing Services Construction
Source: Markit Economics & Ulster Bank NI PMI
Job Gains
Job Losses
Manufacturing posts output & new orders growth over the last three months with modest fall in employment
NI Manufacturing Activity3 month moving average
25
30
35
40
45
50
55
60
65
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
Business activity New Orders Employment
Source: Markit Economics & Ulster Bank NI
Grow
th acceleratingC
ontraction accelerating
NI outperforming the UK and the RoI in terms of manufacturing output growth
Manufacturing Output3 month moving average
30
35
40
45
50
55
60
65
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
NI posts the strongest growth in new orders
Manufacturing New Orders3 month moving average
25
30
35
40
45
50
55
60
65
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
N.Ireland is outperforming its European competitors, aided by sterling’s ongoing weakness
Manufacturing Output - PMI
20
30
40
50
60
70
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
RoI Italy Spain Greece NI
Source: Markit Economics PMIs, NI is 3 month moving average
Contraction
Expansion
Cost price inflation easing for local manufacturing firms and output prices are rising (return of pricing power)
NI Manufacturing Input & Output Inflation3 month moving average
30
40
50
60
70
80
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
No Change Input Costs Output Prices
InflationD
eflation
Source: Markit Economics & Ulster Bank NI PMI
Profits squeeze
PMI signals job gains in Q1 2013 followed by a fall in employment levels in April
NI Manufacturing Employment: PMI v QES*
30
35
40
45
50
55
60
65
Jun-03 Sep-04 Dec-05 Mar-07 Jun-08 Sep-09 Dec-10 Mar-12 Apr-13
PMI Index
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Q/Q
PMI Employment Index No Change QES Q/Q
Discontinuity in QES Series
Job losses
Job gains
*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 April-13 (monthly)
RoI & UK growth continues while NI’s pace of decline eases
Services Output (excluding Retail)3 month moving average
30
35
40
45
50
55
60
65
70
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
New orders growth slowing in the RoI & picking up in the UK. Meanwhile NI is still contracting albeit at a weaker rate
Services New Orders (excluding Retail ) 3 month moving average
30
40
50
60
70
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
NI’s services sector raised prices for its goods & services in April for the first time since September 2008
NI Services Input & Output Inflation3 month moving average
30
40
50
60
70
80
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
No Change Input Costs Output Prices
InflationD
eflationSource: Markit Economics & Ulster Bank NI PMI
Profits squeeze
…with employment levels still falling in NI over the last three months
Services Employment3 month moving average
30
35
40
45
50
55
60
65
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
UK RoI NI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
The services PMI underestimated modest employment gains in Q2-Q4 & signals modest decline in Q1 2013
NI Services Employment: PMI v QES*
40
45
50
55
60
65
Jun-03 Sep-04 Dec-05 Mar-07 Jun-08 Sep-09 Dec-10 Mar-12 Apr-13
PMI Index
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
Q/Q
PMI Employment Index No Change QES Q/Q
Discontinuity in QES Series
Job losses
Job gains
*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 April-13 (monthly)
Local retailers still reporting falling orders & activity
Northern Ireland Retail PMI3 monthly average
25
35
45
55
65
75
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
Business Activity New Orders Backlogs No Change
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
Profits squeeze on local retailers appears to be easing
NI Retail Input & Output Inflation3 month moving average
30
40
50
60
70
80
90
Apr-04 Oct-05 Apr-07 Oct-08 Apr-10 Oct-11 Apr-13
Input Costs Output Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI
Profits squeeze
NI construction sector still in the midst of a severe downturn
NI Construction PMI3 month moving average
20
30
40
50
60
Feb-09 Dec-09 Oct-10 Aug-11 Jun-12 Apr-13
Output New Orders Employment
Source: Markit Economics, Ulster Bank PMI
ExpansionC
ontraction
50 = No change
…with profits squeeze continuing
NI Construction Sector Profits Squeeze3 month moving average
20
30
40
50
60
70
Feb-09 Dec-09 Oct-10 Aug-11 Jun-12 Apr-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)
NI Construction Employment: PMI v QES
20
25
30
35
40
45
50
55
60
65
Jun-03 Sep-04 Dec-05 Mar-07 Jun-08 Sep-09 Dec-10 Mar-12 Apr-13
PMI Index
-10.0%
-7.5%
-5.0%
-2.5%
0.0%
2.5%
5.0%
Q/Q
PMI Employment Index No Change QES Q/Q
Discontinuity in QES Series
Job losses
Job gains
*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 April-13 (monthly)
UK, RoI & NI all post contractions in construction output
Construction Sector Output - PMI3 month moving average
20
30
40
50
60
Feb-09 Dec-09 Oct-10 Aug-11 Jun-12 Apr-13
PMI Index
NI UK RoI
Source: Markit Economics
ExpansionC
ontraction
… and with new orders falling in NI, UK & RoI
Construction Sector New Orders - PMI3 month moving average
20
30
40
50
60
Feb-09 Dec-09 Oct-10 Aug-11 Jun-12 Apr-13
PMI Index
NI UK RoI
Source: Markit Economics
ExpansionC
ontraction
Growth opportunities for NI firms within GB will wane as activity eases
UK Construction Activity - PMIs3 month moving average
20
30
40
50
60
70
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Housing Activity Commercial Activity Civil Engineering Activity
Source: Markit Economics
ExpansionC
ontraction
Lack of opportunities in the RoI with all construction sub-sectors declining in April
Republic of Ireland Construction Activity - PMI3 month moving average
20
30
40
50
60
70
Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13
Housing Activity Commercial Activity Engineering Activity
Source: Markit Economics & Ulster Bank
ExpansionC
ontraction
50 = No change
Slide 53
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