Following a strong rebound in economic activity, last week saw a slight pullback across macro indicators. While the public health experts in the UK are warning about future lockdowns, especially during the winter months, and PM Johnson confirmed the delay in full reopening by four weeks, there remains no obvious signs of consumer concerns yet.
The latest data download from NISRA represents the most positive set of labour market statistics since the pandemic arrived. All the key indicators moved in the right direction. Unemployment and economic inactivity rates fell in the three months to April relative to the previous quarter. Meanwhile the number of Northern Ireland employees on payrolls, hours worked and the employment rate all increased. Perhaps the only fly in the ointment was self-employment fell to a 19-year low and there was a pick-up in proposed redundancies in the first half of June albeit from very low levels. Today’s labour market statistics coupled with the recent Ulster Bank Northern Ireland PMI surveys for April and May signal that the local jobs recovery has moved up a number of gears in the second quarter. Indeed, May’s PMI posted the joint-fastest rise in private sector staffing levels in the survey’s nineteen year history.
An easing of lockdown restrictions has facilitated a significant rebound in economic activity and employment. The successful and rapid rollout of vaccines also effectively ensures that the severe lockdowns of the past will not be required in the near future. However, it is important not to get carried away. This stage of the economic recovery was always going to lead to the strongest rates of growth and pick-up in hiring. Indeed the HMRC payrolls data may reveal a return to pre-pandemic employee levels as soon as next month.
Continue readingAgainst the backdrop of threats of ‘sausage wars’, the latest economic data is encouraging. This signals not only an economic rebound but also the success of the vaccination roll-out and support policies from the year gone by. Can a delay to full reopening turn the tide? Most think not. But one thing to watch our for is whether some households turn a little more cautious as the rate of infections rises.
Today sees the release of May data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – pointed to marked improvements in new orders and output. The extent of the increase in workloads meant that firms expanded their staffing levels at a pace unsurpassed in almost 19 years of data collection. That said, inflationary pressures remained elevated, with the pace of increase in input costs accelerating again.
Northern Ireland new car sales posted another freak year-on-year growth rate in May. There were 3,879 new cars sold locally last month. That represents a whopping 2,594% y/y increase on May 2020’s total (144) and compares with the 13,629% y/y rise recorded in the previous month. These jaw dropping growth rates are explained by the fact that comparisons are being made with last year’s lockdown lows. For example, last April saw just 24 new cars sold. But these seemingly impressive growth rates, while welcome, compare unfavourably with pre-pandemic car sales volumes.
It could be said that we have a Ketchup bottle economy at the minute. Shake a ketchup bottle and nothing happens. But eventually we will get covered in red sauce as the blockage is worked free. Something similar is happening in global supply chains at present and this is impacting on all of our lives.
Another week of upbeat economic data. UK Businesses have now joined consumers in setting records for high performance. But the ‘brightening outlook comes with some discomfort’, as OECD describes it. With a surge in the spread of the delta variant, UK officials are now drawing up a contingent plan for possible delay in June 21 easing.
Amidst the steady drip of very good news on the recovery, last week came a reminder that we’re not out of the woods yet. Rising cases of the Indian variant (or Delta to use the World Health Organisation’s new labelling) underlines that while the risks posed by the virus have certainly diminished, they have not been eliminated.
The Ulster Economix Podcast. The podcast that keeps you up to date with what is happening economy-wise in Northern Ireland. Telling you what you need to know but not necessarily what you want to hear. It is better to be prepared for the economic environment we are operating in and not the world we would like to be in.
It could be said that we have a Ketchup bottle economy at the minute. Shake a ketchup bottle and nothing happens. But eventually we will get covered in red sauce as the blockage is worked free. Something similar is happening in global supply chains at present and this is impacting on all of our lives.
Inflation has been the buzzword in recent weeks around the world. Households are experiencing a pick-up in both consumer prices and house prices. Meanwhile businesses are reporting soaring input costs such as increased freight costs and rising raw material prices. These additional costs will be passed onto firms’ customers in due course.
What does a combination of households sitting on cash piles and firms on a hiring spree give you? A roaring UK economy. Add to this the low base from last year and growth figures are going through the roof. But a note of caution is due. The end of government support plus (hopefully) transitory inflation could take some of the shine away.
