Output rises but confidence continues to slide

Today sees the release of October data from the Ulster Bank Northern Ireland PMI. The latest report – produced for Ulster Bank by IHS Markit – pointed to a slight pick-up in growth in October, with both output and new orders rising more quickly than in September. Rates of expansion were still weaker than seen earlier in the year, however. The rate of job creation also ticked up, but business sentiment dropped to the weakest in the 20-month series history. On the price front, both input costs and output prices increased at sharper rates amid higher costs for a range of inputs.

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Why we need to look closely at the age in wage

If you’re in your 30s, you might want to look away now. Ten years ago, your age bracket was the highest earning on average in Northern Ireland’s private sector, with average earnings more than one-fifth higher than the typical person aged over-60. Today, those in their 30s earn less than any other older working age-bracket. That’s a significant change in a 10-year period and is very much worth exploring.

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Wrong direction

Northern Ireland’s Labour Force Survey (LFS) has been a source of record breaking highs and lows of the positive variety over the last two years.  More recently, Q1 2018 witnessed an all-time low unemployment rate of 3.1% with a record number of people in work in the three months to May. However, the subsequent data has seen rising unemployment coupled with a falling number of people in work.

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Could a beard tax help shave the deficit?

If Philip Hammond has learned from the history of taxation, we could see some interesting developments in the October 29th Budget.

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When we look back at some of the taxes we’ve had in the past, it is clear that taxation has had to continually change to keep pace with the times. In 18th century Britain, a hat tax was introduced to raise revenue from the gentrified. It was effectively a stamp duty on the head-dress of the more wealthy – the bigger the hat, the bigger the tax. Top hats had a top rate of 14%.

Candles were also viewed as an extravagance in Georgian England and therefore drew the interest of the exchequer, leading to the introduction of a candle tax. Similar taxes to target the wealthy at the time included, a beard tax introduced by Henry VIII, or an 18th  century window tax (the bigger the house, the more windows it would have and the more tax the owners would pay). Continue reading

Car industry facing supply and demand issues

According to today’s SMMT new car sales figures, demand for a new set of wheels in Northern Ireland and the rest of Great Britain continues to wane. UK dealers saw new car sales plunge by one-fifth in September relative to last year. Locally, NI car showrooms saw almost 1,000 fewer vehicles sold last month relative to September 2017.  That represents a decline of 15% y/y.  Some 5,365 vehicles were sold last month in Northern Ireland, which represents the quietest September in seven years.

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Record highs and lows but increasing productivity remains the Holy Grail

Following on from the labour market data dump earlier in the week, today saw the release of two output surveys – the Index of Production (mostly manufacturing) and the Index of Services (refers to private sector services only). Both of these surveys posted healthy rates of growth rates in Q2 2018.   Furthermore, there were upward revisions to the first quarter figures.  The upshot of this is the Northern Ireland economy has had a strong start to the year and indeed stronger than previously thought. The Northern Ireland Composite Economic Index for Q2 2018 will be released on 11th October alongside the Index of Construction and is set to record a robust rate of growth in Q2.

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