Ulster Bank NI PMI Slide Pack, April 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
April 2013 Survey Update
Issued 13th May 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 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
ExpansionContraction

… but all sectors within the Eurozone are still contracting
Eurozone PMIs: Output
25
30
35
40
45
50
55
60
65
Composite (M&S) Manufacturing Services Construction
Source: Markit Economics Output Indices

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
Australia
Spain
France
Greece
Italy
Poland
EZ
Ireland
EU
Germany
Austria
NI
Netherlands
Canada
Singapore
India
Turkey
UK
Czech Republic
China
Global
Russia
Vietnam
Israel*
Indonesia
Brazil
Taiwan
Japan
S.Africa
Mexico
N.Zealand*
Switzerland
US
S.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
Australia
France
Spain
Italy
EZ
EU
Germany
NI
India
China
Brazil
Emerging Markets
Japan
Global
UK
Russia
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
Source: Markit Economics PMIs
ContractionExpansion

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

… 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
US (ISM) China Japan Eurozone

… 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

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
**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
65
PMI
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 Activity
3 month moving average
30
35
40
45
50
55
60
65
70
Business Activity New Business Employment
Source: Markit Economics & Ulster Bank NI PMI

Pace of contraction in NI new orders continues. Rate
of growth eases in RoI & accelerates in the UK
Private Sector New Orders
Monthly
30
35
40
45
50
55
60
65
NI UK RoI
OrdersincreasingOrdersContracting

NI’s levels of work outstanding sees its pace of decline
ease markedly over the last 3 months
Private Sector Backlogs
30
35
40
45
50
55
60
Apr-03 Dec-04 Aug-06 Apr-08 Dec-09 Aug-11 Apr-13
NI UK RoI
IncreasingDecreasing

The pace of decline in export orders eases in April
NI New Export Business
Monthly
20
25
30
35
40
45
50
55
60
65
New Export Orders No Change
GrowthAcceleratingContractionAccelerating

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 Levels
Monthly
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
JobGainsJobLosses

Strong input cost inflation coupled with output price
deflation means the profitability squeeze continues
NI Private Sector Profit Squeeze
3 Month Moving Average
30
40
50
60
70
80
Output Prices Input Prices No Change
InflationDeflation
Profits
squeeze
Price of goods &
services falling

3 UK regions post a contraction in business activity
Output / Business Activity
April 2013
50 = No change
48.9
51.0
52.1
40
45
50
55
60
Wal Y&H EM Lon Scot UK SE East SW NW WM NE NI RoI
PMI index

The North East posts the sharpest rate of decline over the
last 3 months followed by NI…
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

…but NI has posted the steepest decline over the
last 12 months
50 = No change
51.5
51
45
40
45
50
55
Lon Y&H Wal EM Scot SE WM UK East NW SW NE NI RoI
PMI index

Four English regions & NI report falling employment
levels in March …
Employment Levels
April 2013
50 = No change
50.7
51.0
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

…and 4 UK regions (incl. NI) post job losses over last 3
months…
Employment Levels
Last 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

NI posts the steepest decline in employment over the
last 12 months
Employment Levels
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

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
Services Manufacturing Construction

‘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
2006
Q3
2007
Q2
2008
Q1
2008
Q4
2009
Q3
2010
Q2
2011
Q1
2011
Q4
2012
Q3
2013
Q2*
PMI Index
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
GDP 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 - PMIs
20
25
30
35
40
45
50
55
60
65
Manufacturing Services Construction No Change

NI services & construction sectors contracting but
manufacturing is growing
NI Private Sector Output
30
35
40
45
50
55
60
65
Manufacturing Services Construction
Source: Markit Economics & Ulster Bank NI
PMI

…with all three sectors reporting falling employment
levels
NI PMI - Employment Index
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
JobGainsJobLosses

Manufacturing posts output & new orders growth over
the last three months with modest fall in employment
NI Manufacturing Activity
25
30
35
40
45
50
55
60
65
Business activity New Orders Employment
GrowthacceleratingContractionaccelerating

NI outperforming the UK and the RoI in terms of
manufacturing output growth
Manufacturing Output
30
35
40
45
50
55
60
65
UK NI RoI No Change

NI posts the strongest growth in new orders
Manufacturing New Orders
25
30
35
40
45
50
55
60
65
UK NI RoI No Change

N.Ireland is outperforming its European competitors,
aided by sterling’s ongoing weakness
Manufacturing Output - PMI
20
30
40
50
60
70
RoI Italy Spain Greece NI
Source: Markit Economics PMIs, NI is 3 month moving average

Cost price inflation easing for local manufacturing firms
and output prices are rising (return of pricing power)
NI Manufacturing Input & Output Inflation
30
40
50
60
70
80
No Change Input Costs Output Prices
InflationDeflation
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
PMI Index
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
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
(monthly)

RoI & UK growth continues while NI’s pace of decline
eases
Services Output (excluding Retail)
30
35
40
45
50
55
60
65
70
UK NI RoI No Change

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 )
30
40
50
60
70
UK NI RoI No Change

NI’s services sector raised prices for its goods &
services in April for the first time since September 2008
NI Services Input & Output Inflation
30
40
50
60
70
80
No Change Input Costs Output Prices
InflationDeflation
Profits
squeeze

…with employment levels still falling in NI over the
last three months
Services Employment
30
35
40
45
50
55
60
65
UK RoI NI No Change

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
PMI Index
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
Q/Q
Job losses
Job
gains
*QES is DFP's official Quarterly Employment Survey of the number
of jobs in NI and includes the public sector
(monthly)

Local retailers still reporting falling orders & activity
Northern Ireland Retail PMI
3 monthly average
25
35
45
55
65
75
Business Activity New Orders Backlogs No Change

Profits squeeze on local retailers appears to be easing
NI Retail Input & Output Inflation
30
40
50
60
70
80
90
Input Costs Output Prices No Change
InflationDeflation
Profits
squeeze

NI construction sector still in the midst of a severe downturn
NI Construction PMI
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
50 = No change

…with profits squeeze continuing
NI Construction Sector Profits Squeeze
20
30
40
50
60
70
PMI Index
Input Prices Output Prices No Change
Source: Markit Economics & Ulster Bank PMI
InflationDeflation

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
PMI Index
-10.0%
-7.5%
-5.0%
-2.5%
0.0%
2.5%
5.0%
Q/Q
Job losses
Job
gains
*QES is NI's official Quarterly Employment Survey of the no. of jobs in NI firms
(monthly)

UK, RoI & NI all post contractions in construction output
Construction Sector Output - PMI
20
30
40
50
60
PMI Index
NI UK RoI

… and with new orders falling in NI, UK & RoI
Construction Sector New Orders - PMI
20
30
40
50
60
PMI Index
NI UK RoI

Growth opportunities for NI firms within GB will wane
as activity eases
UK Construction Activity - PMIs
20
30
40
50
60
70
Housing Activity Commercial Activity Civil Engineering Activity

Lack of opportunities in the RoI with all construction
sub-sectors declining in April
Republic of Ireland Construction Activity - PMI
20
30
40
50
60
70
Housing Activity Commercial Activity Engineering Activity
Source: Markit Economics & Ulster Bank
50 = No change

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.

Ulster Bank NI PMI Slide Pack, April 2013

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

Similaire à Ulster Bank NI PMI Slide Pack, April 2013

Similaire à Ulster Bank NI PMI Slide Pack, April 2013 (18)

Plus de Richard Ramsey

Plus de Richard Ramsey (20)

Dernier

Dernier (20)

Ulster Bank NI PMI Slide Pack, April 2013