Output down for sixth month running in August

Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – suggested that Brexit and associated economic uncertainty led to ongoing declines in the Northern Ireland private sector during August. Marked reductions in output and new orders were recorded, while business confidence hit a new low and job shedding intensified. 

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New orders fall sharply again in July

Northern Ireland’s private sector reported a marked deterioration in business conditions in the second quarter. July’s PMI survey suggests more of the same at the start of the third quarter as output, orders, exports and employment continued to fall last month. The rate of decline across all of these indicators did ease in July relative to June.  However, the pace of contraction in output, orders and exports remained significant with output and orders falling at a faster rate than in any other UK region.

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Firms notched up their seventh successive monthly fall in staffing levels; albeit the pace of job losses in the latest survey was relatively modest. Indeed, a number of respondents’ efforts to hire were thwarted by a lack of suitable staff. Clearly the lack of supply of workers remains a key issue in the labour market rather than simply waning demand.

It won’t surprise anyone to hear that 2019 has been a year of decline for the retail sector.  However, there are actually now some signs that the rapid decline in sales is stabilising. Given the further depreciation in sterling, cross-border shopping is likely to play a more prominent role in the period ahead.

Manufacturing has seen a sharp reversal of fortunes in recent months with the sector posting the sharpest rates of decline in jobs, orders and output of the four sectors. Last month manufacturers reported their steepest fall in output since April 2009. The ongoing fog of Brexit uncertainty is one contributory factor alongside a global manufacturing slowdown.

Elsewhere, services firms, outside of retail, recorded a deterioration in business conditions in July. Significantly, services orders have been falling at an accelerating rate in each of the last five months. Indeed, July saw orders contract at the fastest rate in over seven-and-a-half years. It is a similar story for the construction industry with orders lurching lower again for the eleventh month running.

The employment picture remains the most positive aspect of the latest survey. But it is well known that the labour market is a lagging indicator of economic conditions. Shrinking order books, Brexit uncertainty and the ramping up of tensions between China and the US provide a formidable environment for local firms. Business conditions could well get worse before they start getting better.

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Business Confidence Soars in IT despite ‘Brexit Effect’

A report, which acts as a barometer for the local jobs market indicates that although job hiring is slowing slightly, the IT sector is showing no sign of a slump. Belfast remains a key location for global companies to invest and have access to a talented workforce.

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Downturn deepens in Northern Ireland private sector

Today sees the release of June data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – signalled a deepening downturn in the Northern Ireland private sector. Brexit uncertainty led to sharper falls in output and new orders, with firms pessimistic regarding the 12-month outlook.

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Chief Economist’s Weekly Brief – Waning US growth

A weaker than expected US employment report is adding to rising concerns about the global economy, fuelling expectations that the Federal Reserve will cut rates soon, possibly this summer. ECB president Draghi signalled the door is open for further monetary measures to support the weak Euro area economy, if needed.  

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Third successive monthly fall in activity

Today sees the release of May data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – indicated that the Northern Ireland private sector remained in contraction territory. Activity and new business continued to fall markedly, often linked to Brexit uncertainty. In turn, companies lowered their staffing levels again. There was some relief on the price front, as the rate of input cost inflation eased. That said, the extent of input price increases far outweighed that of selling charges again during the month.

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Chief Economist’s Weekly Brief – Cliff edge deferred

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The EU granted PM Theresa May an extension to Brexit to May 22nd, conditional on Parliament passing the Withdrawal Agreement – a dim prospect. Another rejection would mean the Commons is given up to April 12th  to propose alternatives. The indicative votes this week might offer some clues on what alternatives Parliament could support.

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Weekly Brief – Shifting sands

The landscape for UK politics is changing. News that seven Labour MPs and four Conservative MPs have defected to form a new Independent Group highlights the current fragmented state of UK politics. PM May delayed the “meaningful” vote on Brexit to March 12th, adding to the uncertain picture for the UK economy, meanwhile the labour market powers ahead.

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Employment falls for first time in four years

Today sees the release of January data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – indicated that business conditions in Northern Ireland were subdued at the start of 2019 amid Brexit uncertainty. Business activity rose at the weakest pace in 28 months, while new orders increased only marginally. As a result, companies lowered staffing levels for the first time in four years.

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