Ulster Bank NI PMI - October 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

October 2013 Survey Update
Issued 11th November 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 accelerates in October due to
the services sector with manufacturing slowing…
Global Output - PMI
65

Source: Markit Economics
Expansion

60
55
50

Contraction

45
40
35
30
Total

25
May-07

Apr-08

Mar-09

Manufacturing

Feb-10

Jan-11

Services

Dec-11

Nov-12

Oct-13

… but the Eurozone experiences the opposite trend with
service sector output slowing & manufacturing picking up
Eurozone PMIs: Output
65
Expansion

Source: Markit Economics Output Indices

60
55
50

Contraction

45
40
35
30
Composite (M&S)

Manufacturing

Services

Construction

25
Oct-07

Oct-08

Oct-09

Oct-10

Oct-11

Oct-12

Oct-13

Top performers within manufacturing incl. US, NI & UK.
Underperformers incl. Mexico, France, Greece & India
PMIs: Manufacturing Output October 2013
US
NI
UK
Japan
Switzerland
Czech Republic
Ireland
Denmark
Canada
N.Zealand*
Poland
Austria
Russia
Netherlands
Australia
Taiwan
EU
Italy
Germany
Global
EZ
Turkey
S.Africa
Singapore
Israel*
Indonesia
Spain
Brazil
Vietnam
China
S.Korea
Mexico
France
India
Greece

35

NI, UK & RoI

€

Source: Markit Economics Output Indices,
*Sep, for the US ISM is used.

40

45

50

55

60

65

70

The UK, Ireland & the US post the fastest rate of
service sector output growth in October
PMIs: Services Output October 2013
UK
Ireland
US*
Global
NI
Japan
EU
Germany
China
Russia
Brazil
Emerging Markets
EZ
France
Italy
Spain
Australia
India

€

Source: Markit Economics Output Indices, *
US Non-manufacturing which is wider than
services

35

40

45

50

55

60

65

All 4 of the largest economies within the eurozone are
now expanding but UK & RoI are outperforming them
Composite PMIs
65

(Manufacturing & Services

** Excludes Construction**)

Expansion

60
55
50

Contraction

45
40
35
Source: Markit Economics PMIs

30
May-07

Apr-08

Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

The UK, US & China all saw an acceleration in growth in
October while the rate of growth eased in the Eurozone
Composite PMIs


65
Eurozone

US (ISM)

China

UK
Expansion

60
55
50

Contraction

45
40
Source: Markit Economics PMIs, US includes construction

35
Apr-08

Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

The US, Japan, EZ & China all posted an acceleration in
manufacturing activity in October
Manufacturing PMIs
65

US (ISM)

China

Japan

Eurozone

60
Expansion

55
50

Contraction

45
40
35
30

25
Apr-08

Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

Russia & Brazil post an acceleration in output but pace
of contraction continues in India
Composite PMIs
Brazil

Russia

India

Emerging Markets

No Change

65
Expansion

60
55
50

Contraction

45
40
35

30
May-07

Apr-08

Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

… with Australia’s service sector still contracting
though manufacturing sector continues to improve
Australia - PMI
65
Manufacturing

Services

No Change

60
Expansion

55
50

Contraction

45
40
35

30
May-07

Apr-08

Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

NI, UK & the RoI all post strong rates of growth in
October
Private Sector Business Activity - PMIs
**PMI Surveys Exclude Agriculture & Public Sector**

65
NI

UK

RoI
Expansion

60
55
50
45

Contraction

40
35

Source: Markit & Ulster Bank NI PMI
50 = threshold between expansion / contraction

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

PMI suggests growth in DFP’s new private sector composite index
(combines indices for construction, services, agriculture & industrial production) in Q2, Q3 & Q4

NI Private Sector Output Index Versus NI PMI
PSO Q/Q%

5
4

NICEI Left Hand Scale

PMI Right Hand Scale

50 mark is the threshold for expansion / contraction with PMI
Expansion

3
2

PMI
65
60
55

1
0

50

-1

45

-2

Contraction

-3
-4
-5
-6

Source: New DFP Northern Ireland Composite Economic
Index (NICEI) & Ulster Bank / Markit Economics NI PMI,
* for PMI refers to October

40
35
30

2003 Q2 2004 Q4 2006 Q2 2007 Q4 2009 Q2 2010 Q4 2012 Q2 2013 Q4*

NI firms report an increase in business activity, new
orders & employment in October
NI Private Sector Activity
Monthly
70
Business Activity

New Business

Employment
Expansion

65
60
55
50

Contraction

45
40
35
Source: Markit Economics & Ulster Bank NI PMI

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

Forward looking indicators suggest more growth in all
three economies in the months ahead
Private Sector New Orders
Monthly
NI

UK

Orders increasing

65
RoI

60
55
50

Orders Contracting

45
40
35

30
Oct-03

Oct-05

Oct-07

Oct-09

Oct-11

Oct-13

Surge in demand is leading to backlogs of work
Private Sector Backlogs
3 month moving average
60
UK

RoI

Increasing

NI

55
50

Decreasing

45
40
35

30
Oct-03

Jun-05

Feb-07

Oct-08

Jun-10

Feb-12

Oct-13

NI firms post their 4th successive increase in export
orders in October
NI New Export Business
70
Expansion

New Export Orders

No Change

60

50
Contraction

40

30
Source: Markit Economics & Ulster Bank NI
PMI

20
Oct-03

Oct-05

Oct-07

Oct-09

Oct-11

Oct-13

PMI underestimated job gains in 2012 (relative to official jobs survey).
PMI for Q3 signals fastest rate of jobs growth since Q4 2007
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 public sector

Job
gains

55

0.8%
0.5%
0.3%

Discontinuity in QES Series

50

0.0%
-0.3%

45

-0.5%
Job
losses

40

-1.0%

Source: DFP, Ulster Bank & Markit Economics, PMI
Index 50.0 denotes threshold between expansion /
contraction, * for PMI refers to October only

-1.3%

35

2003 Q4

-0.8%

-1.5%

2005 Q4

2007 Q4

PMI Employment Index

2009 Q4
No Change

2011 Q4
QES Q/Q

2013 Q4*

Firms within the UK, RoI & NI all experienced a faster
rate of jobs growth in October
Private Sector Employment Levels
Monthly

60

UK

RoI

Job Gains

NI

55
50

Job Losses

45
40
35

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

Private sector’s profitability squeeze remains but
pricing power is on the rise
NI Private Sector Profit Squeeze
3 Month Moving Average
Output Prices

Input Prices

No Change

80

Profits
squeeze

70
Inflation

60
50

30

Price of goods &
services rising

PMI

Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

Deflation

40

PMIs experience an Indian summer in October with
strong growth reported everywhere…
Output / Business Activity
October 2013

PMI Index
70

50 = No change

65
61.5

60

58.8

Expansion

57.6

55
50

Contraction

45

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

NE

RoI

…all the UK regions post growth over the last 3 months
3 months to October 2013
PMI Index

50 = No change

65
60.8
58.2
57.2

55

Contraction

50

Expansion

60

45

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

RoI

… and NI is the last UK region to finally post a rise
in output over the last 12 months
PMI Index

50 = No change

60

54.9
53.6

50.9

Contraction

50


45
Lon Wal NW Y&H SE

UK

EM Scot SW East WM NE

Expansion

55

NI

RoI

All the UK regions and the Republic of Ireland post
employment growth in October …
Employment Levels
October 2013

PMI Index

50 = No change

60
58
56

55.7

55.5

Increasing

54

53.1

52

Decreasing

50
48

46
Lon

SE

SW WM UK East Wal NW Scot

NI Y&H NE

EM

RoI

… and over the last 3 months to October
Employment Levels
PMI Index
58

50 = No change

56
54.7

Increasing

54

53.3
52.1

52

Decreasing

50
48
46

44
WM NW SW Lon East Scot SE

UK Wal

NI Y&H EM

NE

RoI

NI posts a marginal decline in employment & RoI the
sharpest rise over the last 12 months
Employment Levels
PMI Index

50 = No change

54
53.0

Increasing

52

51.6

50
Decreasing

49.6

48

46
WM SE East SW Lon Scot Wal UK NW EM Y&H NE

NI

RoI

All three broad UK sectors maintain strong rates of
growth in October with services growth at a 16-year high
UK Business Activity / Output - PMIs
70
Services

Manufacturing

Construction
Expansion

60

50
Contraction

40

30

20
May-07

Apr-08

Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

UK economic growth accelerates in Q2, Q3 & Q4

PMI Index

65

UK GDP versus UK Composite PMI
UK Composite includes Construction
Source: ONS & Markit Economics, * refers October 2013 PMI only

GDP Q/Q

1.5

60

1

55

0.5

50

0

45

-0.5

40

-1

35

-1.5

30

-2

25

-2.5

2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4*
GDP Q/Q

PMI

PMI No Change

All three sectors of the RoI economy post an
acceleration in their growth rates in October
RoI Business Activity - PMIs
Monthly

65
Services

Construction

No Change

60
55

Expansion

Manufacturing

50
Contraction

45
40
35
30
25

20
May-07

Apr-08

Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

All three broad sectors in NI reported increased
levels of business activity over the last 3 months
Northern Ireland Private Sector Output

65

Manufacturing

Services

Construction
Expansion

60
55
50

Contraction

45
40
35

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

…with all sectors also reporting job gains over the last
3 months
NI PMI - Employment Index

65
Manufacturing

Services

Construction
Job Gains

60
55
50

Job Losses

45
40
35
30

25
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

NI’s manufacturing sector posts an acceleration in
employment & output growth over the last 3 months
NI Manufacturing Activity
Business activity

New Orders

Employment

60
55
50

Contraction accelerating

45
40
35
30

PMI

25
Oct-04

Apr-06

Oct-07

Growth accelerating

65

Apr-09

Oct-10

Apr-12

Oct-13

The UK, RoI and NI all witness an acceleration in
manufacturing output during the last 3 months
Manufacturing Output
65
UK

NI

RoI

No Change
Expansion

60
55
50
45

Contraction

40
35

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

The UK posts the strongest growth in new orders
Manufacturing New Orders
65
UK

NI

RoI

No Change
Expansion

60
55
50

Contraction

45
40
35
30

25
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

N.Ireland is outperforming its European competitors
Manufacturing Output - PMI
70
RoI

Italy

Spain

Greece

NI
Expansion

60

50

Contraction

40

30

20
May-07

Apr-08

Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

Cost price inflation remains for local manufacturing firms
but pricing power is improving with increased demand
NI Manufacturing Input & Output Inflation
No Change

Input Costs

Output Prices

80

Profits
squeeze

70
Inflation

60
50

Deflation

40

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

PMI underestimated manufacturing job surge in Q2. PMI
suggests further job gains in Q3 & Q4 2013
PMI Index
65

NI Manufacturing Employment: PMI v QES**

Q/Q
4%

**QES is DFP's official Quarterly Employment
Survey of the number of jobs in NI firms

60

Job
gains

Discontinuity in
QES Series

3%
2%

55
1%
50

0%

45

-1%
Job
losses

40
35

-3%

Source: DFP, Ulster Bank & Markit
Economics, PMI Index 50.0 denotes
threshold between expansion / contraction, *
for PMI refers to October only

-4%
-5%

30

2003 Q4

-2%

2005 Q4

2007 Q4


2009 Q4

2011 Q4

No Change

2013 Q4*

QES Q/Q

Recent growth in NI service sector output / orders is
feeding through into higher levels of employment…
NI Service Sector (excludes Retail)
Business activity

65

New Orders

Growth accelerating

70
Employment

60
55

Contraction accelerating

50
45
40
35

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

All three economies post an acceleration in services
output growth in the 3 months to October…
Services Output (excluding Retail)

70
UK

NI

RoI

No Change

65
Expansion

60
55
50

Contraction

45
40
35


30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

… and strong new orders growth too
Services New Orders (excluding Retail )

70
UK

NI

RoI

No Change
Expansion

60

50
Contraction

40

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

Output prices within service sector firms rise at their
fastest rate in October in over 5 years
NI Services Input & Output Inflation
No Change

Input Costs

Output Prices

80
Profits
squeeze

70
Inflation

60
50

Deflation

40

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

…with employment growth accelerating in the UK &
NI whilst remaining strong in the RoI
Services Employment
65
UK

RoI

NI

No Change
Expansion

60
55
50

Contraction

45
40
35

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

In Q3 the services PMI finally shows quarterly
employment growth for the first time since Q1 2008
PMI Index
65

NI Services Employment: PMI v QES*

Q/Q
1.5%

*QES is DFP's official Quarterly Employment Survey of the number of
jobs in NI and includes the public sector

1.0%

60
Job
gains


55

0.5%

50

0.0%

-0.5%

45
Source: DFP, Ulster Bank & Markit Economics, PMI
Index 50.0 denotes threshold between expansion /
contraction, * for PMI refers to October only

Job losses

-1.0%

40

2003 Q4

2005 Q4

2007 Q4


2009 Q4
No Change

2011 Q4
QES Q/Q

2013 Q4*

Retailers summer boom extends into October
Northern Ireland Retail PMI
3 monthly average

75
Business Activity

New Orders

Backlogs

No Change
Expansion

65

55
Contraction

45

35

25
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

Local retailers maintain pricing power in October
NI Retail Input & Output Inflation
90

Input Costs

Output Prices

No Change

80

Profits squeeze
Inflation

70
60
50

Deflation

40

30
Oct-04

Apr-06

Oct-07

Apr-09

Oct-10

Apr-12

Oct-13

NI construction sector reports growth in output &
employment over the last 3 months but dip in new orders
NI Construction PMI
Output

New Orders

Employment
Expansion

60
50 = No change

50

Contraction

40

30
Source: Markit Economics, Ulster Bank PMI

20
Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

…but output prices have stopped falling
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
Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

NI’s construction PMI posted its first quarter of
employment growth in Q3 2013 since Q4 2007
PMI Index

NI Construction Employment: PMI v QES**

65

Q/Q
5.0%

**QES is NI's official Quarterly Employment Survey of the no. of jobs in NI firms

60
Job
gains

55

50

2.5%
0.0%

45
-2.5%
40
35
30
25

-5.0%
Job losses

Source: DFP, Ulster Bank & Markit
Economics, PMI Index 50.0 denotes
threshold between expansion / contraction, *
for PMI refers to October only

-7.5%

20

2003 Q4

-10.0%

2005 Q4

2007 Q4


2009 Q4
No Change

2011 Q4

2013 Q4*

QES Q/Q

Construction output accelerates in the UK, RoI and NI
over the last 3 months
Construction Sector Output - PMI
PMI Index
NI

UK

RoI
Expansion

60

50
Contraction

40

30

20
Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

New orders growth accelerating in the UK & RoI but
dips in NI
Construction Sector New Orders - PMI

PMI Index
UK

RoI

Expansion

NI

60

50
Contraction

40

30

20
Mar-09

Feb-10

Jan-11

Dec-11

Nov-12

Oct-13

Opportunities for NI firms within GB market. House building
sector expanding at its fastest rate in almost 10 years…
UK Construction Activity - PMIs

70
Housing Activity

Commercial Activity

Civil Engineering Activity
Expansion

60

50

Contraction

40

30

20
Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

Oct-11

Oct-12

Oct-13

…with opportunities returning within the RoI too
Republic of Ireland Construction Activity - PMI

70
Housing Activity

Commercial Activity

Engineering Activity

Expansion

60
50 = No change

50

Contraction

40

30
Source: Markit Economics & Ulster Bank

20
Feb-07

Dec-07

Oct-08

Aug-09

Jun-10

Apr-11

Feb-12

Dec-12

Oct-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 55

Ulster Bank NI PMI - October 2013

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Andere mochten auch

Andere mochten auch (8)

Ähnlich wie Ulster Bank NI PMI - October 2013

Ähnlich wie Ulster Bank NI PMI - October 2013 (17)

Mehr von Richard Ramsey

Mehr von Richard Ramsey (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Ulster Bank NI PMI - October 2013