PMI survey readings for November unsurprisingly indicated a setback in the recovery. The silver lining is that it’s a lot less compared to the first lockdown. It’s the challenge beyond implied by a stricter tiering system that’s the new concern. A difficult winter no doubt. The recovery will only get down to business when a vaccine is rolled out.
We’ve published a new Ulster Economix Podcast episode: Breakthrough, hosted by Richard Ramsey, Chief Economist at Ulster Bank.
You wait ages and then three come along at once. Since March, it has been clear that a highly effective vaccine is required to cope with COVID-19. A sustained and meaningful economic recovery can only take hold if one is found. Following the encouraging news on three potential vaccines hope has returned. First out of the traps was Pfizer and BioNTech successful trials. Their news saw the share price of Zoom & Peloton slump and those of airlines and cruise ships soar.
A fresh round of lockdown restrictions in November and December coupled with the incoming news on the vaccine front has seen economists continue to revise down economic forecasts for 2020 and simultaneously revise up growth expectations for 2021. This doesn’t mean that the sunlit uplands are around the corner.
So what the local economy in Northern Ireland? what is the incoming economic data and news telling us about the economy and the strength of the recovery?
Rishi Sunak hasn’t yet completed a year as Chancellor but he is a crisis veteran. The word ‘emergency’ featured four times in Sunak’s speech in which he outlined the UK’s three emergencies. These are health, economic and fiscal. “Our health emergency is not yet over. And our economic emergency has only just begun”.
Recent developments on the vaccine front have provided a much needed shot in the arm for optimism for 2021. In turn, that has filtered through to the economic forecasts. Nevertheless, there is no economic vaccine for the deepest recession in 300 years, just painkillers.
Continue readingIt is that time of year when you are shopping for nephews and nieces. Gamble with a gift you are not sure they will like? Or play it safe with a voucher? What type of voucher – specific or generic? Or instead just plump for cash – the most flexible store of value there is. After all Cash is King!
The incoming data for October shows what was widely expected, a slowdown in momentum. Mobility indicators have retreated as much of the world has reverted to some combination of reimposed restrictions. At least there are hopeful signs across countries of the latest wave having peaked or indeed being in retreat, but it is still early days.
Last week’s hugely encouraging news on the vaccine, as well as a slowing of new cases in Western Europe, was tempered by mounting growth concerns. Before the sunlit uplands of a vaccine-inspired rebound, a very challenging winter awaits us. In many parts, the coming months will see the recovery go into reverse.
Continue readingWe’re currently in what they call corporate earnings season and we’re getting a flavour of how COVID has been hitting big business. Some companies have been doing well whilst others have struggled. Marks & Spencer on the one hand has seen its first quarterly loss since it was listed on the stock market 94 years ago. By contrast, the likes of Amazon has been generating record earnings as its business model is well suited to the pandemic.
While it’s lockdowns and growth downgrades on this side of the World, things are different over in China. Its impressive recovery rolls on, with the export sector playing a handy supporting role.
Today sees the release of October data from the Ulster Bank Northern Ireland PMI. The latest report – produced for Ulster Bank by IHS Markit – signalled a stagnation of business activity across the Northern Ireland private sector as new orders fell again. Firms also continued to scale back staffing levels. Meanwhile, rates of inflation of both input costs and output prices quickened.
To cushion the economic fallout of a second lockdown in England, the Bank of England is expected to supplement the extended Job Retention Scheme with a further dose of monetary stimulus later this week. And that’s after the small matter of an historic US election.
