Economic inactivity jumps

As far as positive headlines are concerned, Northern Ireland’s labour market statistics have been a source of rich pickings over the last 18 months. Once again today’s batch of data raises an eyebrow or two. Chief amongst these is the fall in the ILO unemployment rate – to 4.0% in Q3. This represents the lowest unemployment rate since Q2 2008 and compares with a record low of 3.2% in the summer of 2007. Continue reading

Sharp rise in new orders supports further growth of activity

PMI-1Today sees the release of October data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – indicated that the private sector remained firmly in growth territory, despite rates of expansion in output and new orders easing from the previous month. Firms continued to take on extra staff at a solid pace. Meanwhile, input costs rose sharply again and the rate of output price inflation quickened. Continue reading

No surprise that new car sales are falling

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Northern Ireland retailers have benefited from the tourism boom and a surge in cross-border shoppers.  With the latter boosted by the post-EU referendum depreciation in sterling. This provides a veneer of consumer strength driven by visitors. However, the underlying picture is somewhat weaker.

New car sales are a key barometer of consumer confidence and provide a more meaningful indicator of the health of the consumer. Inflation has been outpacing wage growth and this is sapping household disposable incomes. A significant range of welfare benefits are also in the midst of a multi-year freeze. Against this background it is perhaps not surprising that the biggest discretionary spending item after housing, new car sales, are falling.

Showrooms reported their worst October for sales of new cars in five years, with registrations for the first 10months of the year down over 5% y/y.

2017 looks set to see the biggest annual decline since 2011. Local new car sales are over 20% below their peak in 2007.

This compares with the UK where new car sales, though falling, are still 8% above their pre-recession high. 2018 is also expected to be a challenging year for the local consumer with the cost of living squeeze set to tighten its grip.

Chief Economist’s Weekly Briefing – Over the line?

Manufacturing (2).jpgIt wasn’t blockbuster but UK GDP growth was slightly better than expected last quarter, lending a little support to members of the Bank of England’s Monetary Policy Committee minded to raise rates this week. But will it be enough to get a rate hike over the line?  We’ll find out lunchtime on Thursday. Continue reading

Chief Economist’s Weekly Briefing – Calling into question

It’s a familiar narrative for the UK. Strong job growth but signs of a weakening consumer on the back of paltry income growth squeezed by higher inflation. Yet markets are convinced the Bank of England is raising rates on 2 November. The latest data suggests the decision will likely be more finely balanced for policy-makers.          Continue reading