Northern Ireland PMI slide pack, January 2013

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 2013 Survey Update
Issued 11th February 2013

Richard Ramsey

Chief Economist Northern Ireland

richard.ramsey@ulsterbankcm.com

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         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 from 9-month high with
manufacturing posting its 3rd successive month of growth
Global Output - PMI
65
Source: Markit Economics

60

Expansion
55

50

45

Contraction
40

35

30
Total Manufacturing Services
25
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

All sectors within the Eurozone are still contracting

Eurozone PMIs: Output
65
Source: Markit Economics Output Indices

Expansion
60

55

50

Contraction
45

40

35

30
Composite (M&S) Manufacturing Services Construction
25

Greece, Australia & France post steepest falls in
manufacturing output. Denmark posts strongest gain
PMIs: Manufacturing Output January 2013
Denmark
Mexico
Switzerland
Turkey
Brazil
UK
India
US
Taiwan
Russia
China
N.Zealand
Global
Germany NI, RoI & UK
Ireland
Netherlands
Vietnam
NI
Canada
Poland
Singapore
Indonesia
South Africa
Austria
EU
Italy
S.Korea
Czech
EZ
Japan
Israel
Spain
France Source: Markit Economics Output Indices
Australia
Greece

35 40 45 50 55 60 65

Services output expanding for BRICs, US, Germany, Japan &
Ireland. France & Italy posting the steepest contractions
PMIs: Services Output January 2013
India
Ireland
US*
Russia
Germany
Emerging Markets
Brazil
China
Global
Japan
UK
EU
EZ €
Spain
Australia
NI Source: Markit Economics Output Indices, * US Non-
Italy manufacturing which is wider than services
France

40 45 50 55 60 65

Divergence between Germany & France is worth
watching
Composite PMIs
(Manufacturing & Services ** Excludes Construction**)
65

60

Expansion
55

50

Contraction
45

40

35
Source: Markit Economics PMIs

30

US remains the best performer relative to China, UK & EZ
Composite PMIs
(Manufacturing & Services ** Excludes Construction**)
65
Eurozone US (ISM) China UK
60

Expansion
55

50

Contraction
45

40
35
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

… and US manufacturing is expanding at a faster rate
than China
Manufacturing PMIs
65
US (ISM) China Japan Eurozone
60

Expansion
55

50

Contraction
45

40

35

30
25
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

UK & RoI above the expansion threshold whilst the rate of
contraction eases for Northern Ireland
Private Sector Business Activity - PMIs
**PMI Surveys Exclude Agriculture & Public Sector**
65
NI UK RoI
60

Expansion
55

50

45

Contraction
40

35 Source: Markit & Ulster Bank NI PMI: 50 = threshold
between expansion / contraction
30
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

PMI suggests further falls in private sector composite index (combines DFP
indices for construction, services & industrial production) in Q4 2012 but growth in Q1?

NI Private Sector Output Index Versus NI PMI
PSO Q/Q% PMI
UB PSO Left Hand Scale UB PMI Right Hand Scale
5 65
50 mark is the threshold for expansion / contraction with PMI
4
60
3
Expansion
2 55

1
50
0
45
-1
-2 40
-3
Contraction
35
-4
Source: Ulster Bank Private Sector Output (Index 2009 = 100) up to Q3 2012 & Markit Economic, * is January only

-5 30
2004 Q1 2005 Q3 2007 Q1 2008 Q3 2010 Q1 2011 Q3 2013 Q1*

NI output, new orders and employment all see their
pace of contraction ease over the last 3 months
NI Private Sector Activity
3 month moving average
70
Business Activity New Business Employment
65

Expansion
60

55

50

45

Contraction
40

35
Source: Markit Economics & Ulster Bank NI PMI
30

Pace of contraction in NI new orders eases with UK flat

Private Sector New Orders
65

Orders increasing
NI UK RoI
60

55

50

45

Orders Contracting
40

35
30
Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan-
03 04 05 06 07 08 09 10 11 12 13

NI’s levels of work outstanding still falling at a rapid rate

Private Sector Backlogs
60
NI UK RoI

Increasing
55

50

45

Decreasing
40

35
30
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

Export orders post its highest reading since January 2008

NI New Export Business
Monthly

Growth Accelerating
65
New Export Orders No Change
60

55

50

45

Contraction Accelerating
40

35

30

25
20
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

PMI underestimated job gains in Q2 & Q3 (relative to official jobs
survey) further job losses signalled in Q4 2012 but growth in Jan-13

PMI Index NI Employment: PMI v QES* Q/Q
60 1.0%
*QES is DFP's official Quarterly Employment Survey of the
number of jobs in NI & includes the public sector 0.8%
55 Job 0.5%
gains
0.3%
Discontinuity in QES Series
50 0.0%
-0.3%
45 -0.5%
Job
losses
-0.8%
40 Source: DFP, Ulster Bank & Markit Economics, PMI -1.0%
Index 50.0 denotes threshold between expansion /
contraction,PMI 3mth averages except January 2013
-1.3%
which is based on single month
35 -1.5%
Mar-04 Sep-05 Mar-07 Sep-08 Mar-10 Sep-11 Jan-13
PMI Employment Index No Change QES Q/Q

Employment gains in the UK, NI & the RoI in January. The
last time all 3 posted employment gains was November 2007
Private Sector Employment Levels
Monthly
60
NI UK RoI

Job Gains
55

50

Job Losses
45

40

35
30

Input cost inflation accelerates in January with output
prices and charges still falling
NI Private Sector Profit Squeeze
3 Month Moving Average
80
Output Prices Input Prices No Change

Profits
70 squeeze

Inflation
60

50

Deflation
40
Price of goods &
Source: Markit Economics & Ulster Bank NI PMI services falling

30

2 UK regions post a contraction in January with the North
East posting the steepest decline followed by NI…
Output / Business Activity
January 2013
PMI index
60 50 = No change

Expansion
55 53.8

51.7

50
48.3

Contraction
45

40

35
Wal Y&H EM SE Lon Scot UK SW East NW WM NI NE RoI

NI posts sharpest rate of decline over the last 3 months…

3 months to January 2013
PMI Index 50 = No change
56

Expansion
54 53.5

52
50.6

50

Contraction
48

46
44.9
44

42
40
Wal Y&H Lon Scot SE UK SW NW East WM EM NE NI RoI

……and over the last 12 months
PMI index 12 months to January 2013
50 = No change
55

Expansion
51.7 51.6

50

Contraction
45

43.7

40
WM Lon Y&H EM SE UK Wal Scot East NW SW NE NI RoI

Three English regions report falling employment levels
in January …
Employment Levels
January 2013
PMI Index
56 50 = No change

Increasing
54 53.3

52 51.3
50.7

Decreasing
50

48

46

44
42
SE Y&H East EM WM UK Lon Scot NI Wal NW NE SW RoI

…and 5 UK regions (incl. NI) post declines over last 3
months…

Employment Levels
PMI Index Last 3 months to January 2013
54
50 = No change 52.7

Increasing
52
50.2
50

Decreasing
49.0
48

46

44
42
SE Y&H EM East Scot Wal UK WM SW NE Lon NI NW RoI

NI posts the steepest decline in employment over the
last 12 months
Employment Levels
12 months to January 2013
PMI Index 50 = No change
54

Increasing
52
50.9
50.5

50

Decreasing
48
47.4

46

44
42
EM WM SE Y&H Scot East UK SW Wal Lon NE NW NI RoI

UK services rebounds in January with manufacturing
output growth accelerating. Only construction is sub-50

UK Business Activity / Output - PMIs
70
Services Manufacturing Construction

Expansion
60

50

Contraction
40

30

20

UK composite PMI raised the prospect of negative GDP
Q4 reading which was realised with a 0.3% decline

UK GDP versus UK Composite PMI
PMI Index GDP Q/Q
65 1.5
60 1
55 0.5
50 0
45 -0.5
40 -1
35 -1.5
30 -2
Source: ONS & Markit Economics, * refers to Jan-13
25 -2.5
2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1*
GDP Q/Q PMI PMI No Change

Services & manufacturing remain above 50 in the RoI

RoI Business Activity - PMIs
65
Manufacturing Services Construction No Change

Expansion
60

55

50

Contraction
45

40

35

30

25
20

All sectors in NI contracting….
NI Private Sector Output
65
Manufacturing Services Construction

60

Expansion
55

50

Contraction
45

40

35
Source: Markit Economics & Ulster Bank NI
30

… with services and construction sectors still reporting
falling employment levels
NI PMI - Employment Index
65
Manufacturing Services Construction

Job Gains
60
55
50
45

Job Losses
40
35
30
25

Manufacturing posts employment and new orders
growth over the last three months
NI Manufacturing Activity
65

Growth accelerating
Business activity New Orders Employment
60

55

50

Contraction accelerating
45

40

35

30
25

UK manufacturing output accelerates in January
while the RoI sees the pace of growth ease

Manufacturing Output
65
UK NI RoI No Change

Expansion
60

55

50

45

Contraction
40

35
30
Jan-04 Jul-05 Jan-07 Jul-08 Jan-10 Jul-11 Jan-13

All 3 economies post growth in new orders
Manufacturing New Orders
65
UK NI RoI No Change

Expansion
60

55

50

45

Contraction
40

35

30
25
Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

N.Ireland manufacturing lagging economies elsewhere

Manufacturing Output - PMI
70
Source: Markit Economics PMIs

Expansion
60

50

Contraction
40

30
China Germany US NI UK
20

Ireland is still outperforming its Eurozone partners & NI

Manufacturing Output - PMI
70
RoI Italy Spain Greece NI

Expansion
60

50

40

Contraction
30

Source: Markit Economics PMIs, NI is 3 month moving average
20

Cost price inflation accelerating for local manufacturing
firms though output prices have stopped falling
NI Manufacturing Input & Output Inflation
No Change Input Costs Output Prices
80
Profits
squeeze

70

Inflation
60

50

Deflation
40

30

PMI signals no major job losses in Q4 & growth in Q1 (Jan-
13) but FG Wilson announcement still to take effect
PMI Index
NI Manufacturing Employment: PMI v QES* Q/Q
65 4%
*QES is DFP's official Quarterly Employment
Survey of the number of jobs in NI firms 3%
60 Discontinuity in
QES Series Job
gains 2%
55
1%
50 0%

45 -1%
Job
losses -2%
40
Source: DFP, Ulster Bank & Markit PMI Index 50 -3%
denotes threshold between expansion /
35 contraction,PMI 3mth averages except Jan-13 -4%
(monthly)

30 -5%

RoI growth continues while the UK output rebounds in
January. Meanwhile NI still posts declines in output
Services Output (excluding Retail)
70
UK NI RoI No Change
65

Expansion
60
55
50

Contraction
45
40
35
30

New orders growth slowing in the UK and continues
to contract at a rapid rate in NI
Services New Orders (excluding Retail )
70
UK NI RoI No Change

Expansion
60

50

Contraction
40

30

…with employment levels still falling in NI over the
last three months (but growth returned in January)
Services Employment
65
UK RoI NI No Change

Expansion
60

55

50

45

Contraction
40

35
30

The PMI signals modest employment declines for the
service sector in Q4. But PMI includes private sector only

PMI Index
NI Services Employment: PMI v QES* Q/Q
65 1.5%
*QES is DFP's official Quarterly Employment Survey of the number
of jobs in NI and includes the public sector

60 1.0%

55 Job
0.5%
gains

50 0.0%

45 Source: DFP, Ulster Bank & Markit Economics, PMI -0.5%
Index 50.0 denotes threshold between expansion /
contraction,PMI 3mth averages except January 2013
which is based on single month Job losses
40 -1.0%

Local retailers still reporting falling orders & activity
but pace of decline has eased
Northern Ireland Retail PMI
3 monthly average
70
Business Activity New Orders Backlogs No Change
65

Expansion
60

55

50

Contraction
45

40

35

30
25

Profits squeeze on local retailers intensifies

NI Retail Input & Output Inflation
90
Input Costs Output Prices No Change
Profits
80
squeeze

Inflation
70

60

50

Deflation
40
30

NI construction sector still in the midst of a severe downturn

NI Construction PMI

Output New Orders Employment

Expansion
60

50 = No change
50

Contraction
40

30

Source: Markit Economics, Ulster Bank PMI

20
Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13

…with profits squeeze continuing
NI Construction Sector Profits Squeeze
PMI Index
Input Prices Output Prices No Change
70

Inflation
60

50

Deflation
40

30
Source: Markit Economics & Ulster Bank PMI
20

NI PMI has been a reasonably good predictor of actual
job losses in the official employment surveys (QES)

PMI Index
NI Construction Employment: PMI v QES Q/Q
65 5.0%
*QES is NI's official Quarterly Employment Survey of the no. of jobs in NI firms
60
Job 2.5%
55 gains
50 0.0%

45
-2.5%
40

35 -5.0%

30
Source: DFP, Ulster Bank & Markit PMI Index 50 -7.5%
Job losses
denotes threshold between expansion / contraction,PMI
25 3mth averages except Jan-13 (monthly)

20 -10.0%

UK, RoI & NI all post contractions in construction output

Construction Sector Output - PMI
PMI Index
NI UK RoI

Expansion
60

50

Contraction
40

30

20

… and with new orders falling in NI, UK & RoI
Construction Sector New Orders - PMI
PMI Index

NI UK RoI

Expansion
60

50

Contraction
40

30

20

Growth opportunities for NI firms within GB will wane
as activity eases
UK Construction Activity - PMIs
70
Housing Activity Commercial Activity Civil Engineering Activity

Expansion
60

50

40

Contraction
30

20

Lack of opportunities in the RoI with all construction
sub-sectors declining in January
Republic of Ireland Construction Activity - PMI

70
Housing Activity Commercial Activity Engineering Activity

Expansion
60

50 = No change
50

40

Contraction
30
Source: Markit Economics & Ulster Bank

20
Mar-07 May-08 Jul-09 Sep-10 Nov-11 Jan-13

Disclaimer

This document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and is
not intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service in
any jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a position or
engage in transactions in any of the instruments mentioned.

The information including any opinions expressed and the pricing given, is indicative, and constitute our judgement at time of publication and
are subject to change without notice. The information contained herein should not be construed as advice, and is not intended to be
construed as such.

This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained here
without seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to the
information and disclaim all liability for use the recipient or their advisors make of the information.

Over-the-counter (OTC) derivates can involve a number of significant and complex risks which are dependent on the terms of the particular
transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incur
substantial costs if you wish to close out your position.

Calls may be recorded.

Slide 52

Northern Ireland PMI slide pack, January 2013

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Andere mochten auch

Andere mochten auch (9)

Ähnlich wie Northern Ireland PMI slide pack, January 2013

Ähnlich wie Northern Ireland PMI slide pack, January 2013 (20)

Mehr von Richard Ramsey

Mehr von Richard Ramsey (20)

Northern Ireland PMI slide pack, January 2013