Output and new orders continue to expand solidly

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Today sees the release of November data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – pointed to further solid increases in output and new orders, with rates of expansion in both slightly quicker than those recorded in October. Rising workloads led to a further accumulation of outstanding business, with companies increasing staffing levels accordingly. Meanwhile, input cost inflation accelerated to a six-month high. 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 – 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

Inflation tightens its grip on UK households

Shoppers will increasingly have noticed that the price of their groceries and the cost of filling up at the forecourt have been on the rise. Last month UK consumer price inflation, using the CPI measure, rose by 3% y/y.  This represents the fastest rate of increase since April 2012. Inflationary pressures are more marked within consumer goods (+3.2% y/y) rather than services (+2.7% y/y). Meanwhile the most comprehensive measure of inflation, the CPIH index which includes owner occupiers’ housing costs along with Council Tax (or rates in NI), nudged higher to 2.8% y/y in September. Continue reading

Sharpest rise in activity in 2017 so far

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Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The Northern Ireland private sector recorded faster rises in output and new orders during August, supporting further job creation. Sterling weakness played an important role in the local economy, helping firms to secure new export orders but also adding to inflationary pressures. Continue reading