1. 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 2017 Survey Update Issued 10th September 2018
Richard Ramsey Chief Economist Northern Ireland

2. < 50.0 = Contraction 50.0 = No Change > 50.0 = Expansion
PMI Surveys
Purchasing 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 = 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.

3. August 2018 Global PMIs – Key highlights
Global output growth slows to 5-mth low (53.4) with manufacturing activity improving marginally from July’s 22-mth low
Growth slows in China, India, Brazil (contracting) & the US
China manufacturing & services PMIs slip to 14-mth & 10-mth lows
Global manufacturing export orders remain at a 2-yr low of 50.3
Emerging Markets PMI falls to a 10-month low of 51.8.
Developed Markets PMI slows to a 5-mth low of 54.0
EZ composite PMI rises from 54.3 to 54.5 with improvements for Germany, France & Spain. But Italian PMI slows to a 22-mth low with its manufacturing PMI contracting for the first time in 44mths
RoI composite PMI rises from 56.9 to 57.5
UK composite PMI rises from 53.7 (July) to 54.1 driven by services
Yorkshire & Humber and the East of England posted the fastest rates of growth in output with the North East flirting with stagnation
The South East saw output growth slow to a 25-mth low

4. August 2018 Northern Ireland PMI – Key highlights
Business & new orders growth slow to 4-mth lows of 53.9 & 53.1.
NI firms saw the sharpest slowdown of all UK regions in August
Jobs growth accelerates from July’s 12-mth low of 51.5 to 52.1
Input cost inflation eased to a 5-month low but remains elevated
NI inflationary pressures are the most marked of any UK region
Export orders growth continued but eased to a 10-mth low (52.3)
Backlogs of work fell for the first time in 14 months
All sectors bar manufacturing saw slower rates of output growth
Retailers posted the most significant slowdown of all sectors
Manufacturing saw growth in output, orders & jobs accelerate
All sectors bar retail saw input cost inflation ease
Retailers saw input cost inflation accelerate to an 18-mth high
Services firms continue to raise prices at fastest rate in a decade
Construction firms expect activity to fall over the next 12 months

5. Global output growth slows due to services (5-mth low) with manufacturing output just above July’s 22-month low

6. Slower rates of growth evident with US & Chinese PMIs while EZ, UK & Japan report faster rates of growth

7. Developed & Emerging Markets PMIs slow to 4-month and 10-month lows respectively

8. Emerging Markets’ PMI hits 10-mth low driven by China, India and Brazil (contracting again)

9. Chinese manufacturing and services PMIs hit 14-month and 10-month lows respectively

10. Italy is the only one of the Eurozone’s four largest economies not to post faster rates of growth in August

11. Eurozone sees some softening in manufacturing activity with construction output at a 21-month low

12. EZ PMI suggested a more notable slowdown in Q2 GDP growth than occurred. Q3* sees a slight easing

13. The Republic of Ireland, France & the US post the fastest rates of services growth in August

14. Chinese and Eurozone manufacturing PMIs ease in August while US ISM accelerates to a 14+yr high

15. Developed & Emerging Markets’ Manufacturing PMIs slip to 14-month lows

16. NI’s private sector reports a slowdown in activity with the pace of growth broadly in line with the UK

17. PMI more positive than Composite Index
PMI more positive than Composite Index. Latter includes hefty falls in manufacturing output due to closure of JTI plant.

18. Output growth running at a 4-yr high year-to-date 2018 with pace of new orders & jobs growth easing

19. Business activity and new orders growth accelerating but pace of jobs and export orders growth is slowing

20. NI firms report a pick-up in the pace of job creation but a slowdown in business activity and new orders growth

21. NI, UK & RoI firms post a slowdown in new orders growth

22. NI firms report an easing in backlogs of work with a decline in August

23. NI firms report the weakest growth rate in export orders in 10 months

24. NI & UK employment growth accelerates in August but the pace of job creation still lags behind the RoI

25. NI’s firms in hiring mode in H1 2018 though pace of job creation has been slowing in H2

26. Squeeze on profit margins continues

27. Regional Comparisons

28. NI goes from the fastest growing UK region in July to one of the slowest in August

29. East Midlands & the East of England top the growth table for 3-months to August with NI ranked 4th

30. The East Midlands posts the fastest rates of growth over the last year with the North East the slowest

31. NI’s private sector the least optimistic within the UK after the North East of England

32. NI’s pace of job creation below the UK average

33. During the three months to August NI’s employment growth rate was in line with the UK average

34. The East of England & West Midlands top the table for jobs growth with the South East & North East at the bottom

35. Sectoral Comparisons

36. UK construction & manufacturing output growth slows while services posts faster rates of expansion

37. UK PMI suggests Q3 GDP growth of around 0.4% q/q

38. All sectors of the RoI economy continue to report strong rates of growth in August

39. Acceleration in NI private sector output growth in Q3
Acceleration in NI private sector output growth in Q3* evident in construction, manufacturing & retail

40. NI construction & manufacturing firms report a pick-up in output growth during the three months to August

41. Pace of hiring quickens eases within construction & services sector but accelerates amongst manufacturers

42. All sectors report an easing in input cost inflationary pressures

43. Retail remains the only sector reporting a notable easing in output price inflationary pressures

44. NI’s manufacturers reporting strong rates of output & new orders growth with hiring picking up too

45. Manufacturing output growth accelerates amongst NI & RoI firms but UK manufacturers report a slowdown

46. NI manufacturing output growth (last 3 months) still remains above its pre-downturn long-term average

47. New orders growth slows for UK manufacturers while NI & RoI firms in particular report faster growth rates

48. NI’s manufacturing PMI performing well against its European peers
NI’s manufacturing PMI performing well against its European peers. Italian PMI hits a 44-mth low

49. Manufacturing inflationary pressures easing again

50. Squeeze on manufacturing profit margins continues though some easing in inflationary pressures

51. Pace of job creation picking up for both NI & RoI manufacturing firms

52. NI’s services sector reports a deterioration in business conditions in August

53. Service sector rebound in output growth evident in UK firms but pace of growth eases for NI firms

54. NI’s services sector in growth mode but pace of expansion is still below its pre-downturn average

55. New orders growth picks up significantly within NI service sector firms but still lags behind the RoI

56. Input cost inflation remains intense with service sector firms raising prices at an increasing rate

57. Pace of hiring accelerates amongst RoI firms but slows for NI services firms & remains subdued in UK

58. Retail sales activity eases following the weather related boost in June & July

59. NI retailers experience another acceleration in inflationary pressures

60. NI’s construction firms report a pick up in business conditions in the three months to August

61. Inflationary pressures remain intense amongst NI construction firms

62. UK & NI firms report a pick-up in construction output in the three months to August but still lag the RoI

63. UK & NI firms report an acceleration in new orders growth but the pace of expansion is well below that of the RoI

64. Slowdown in UK construction activity evident across all sub-sectors with civil engineering activity contracting

65. Construction sector still reporting a shortage of sub-contractors with rates charged rising

66. Optimism amongst UK construction firms remains well below its long-run average

67. RoI commercial & housing activity continues to expand at robust rates with engineering activity picking up too

68. RoI’s construction firms still reporting a decline in the availability of sub-contractors & rising rates of pay

69. RoI construction firms very optimistic about the next 12 months & still well above the long-term average

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