Its productivity, stupid

During George Osborne’s reign at the Treasury, addressing the UK’s productivity challenge took a back seat role to tackling the deficit. In Osborne’s first budget statement (June 2010) the word productivity wasn’t even mentioned.  Conversely, ‘deficit’ was uttered 19 times. Indeed, six of the former Chancellor’s budget speeches failed to mention the word productivity at all. However, Osborne’s last two budgets did see a new focus on productivity with the word appearing 11 times in March. This was perhaps in recognition of the UK’s woeful productivity performance which couldn’t be ignored any longer. Tackling the deficit assumed productivity growth would hold up.  It didn’t. Continue reading

Podcast – latest labour market and output figures


A raft of economic data was released today covering the labour market as well output figures. The figures are broadly positive – not least the fact that the number of people claiming unemployment benefit has fallen.

However, there are a number of challenges – notably the fact that the number of people claiming other benefits is actually rising by as much as the number of people claiming unemployment benefit is falling. Listen to our podcasts to hear more.

Labour market figures


Output figures

August sees rise in output following decline in July


Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by Markit – pointed to a rise in activity following the previous month’s decline. That said, new orders decreased for the second successive month. The rate of input cost inflation accelerated to the fastest since November 2011 and firms also raised their output prices at a sharper pace. Continue reading

Chief Economist’s Weekly Brief – Decision time


With five weeks to go before the EU referendum the campaigns are now in full swing and scrutinising every piece of data for signs of Brexit nervousness. Yet there’s still a lot going on that isn’t driven by our domestic political agenda and the Bank of England conceeded that the noise is making its job of interpreting the data more difficult.  Continue reading

Chief Economist’s Weekly Brief – Slipping and sliding

The world economy seems to be struggling a bit. The latest global PMI manufacturing survey figure was consistent with growth between 2%y/y and 3%y/y. That is weak. But it is also predominantly centred on emerging economies. The US and Eurozone are not sliding yet. That is good. But the UK is. That is not good. Continue reading

Ulster Bank PMI: Year of growth marked in April

Today sees the release of April data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by Markit – signalled a further solid increase in output, supported by ongoing growth of new work.

That said, rates of expansion eased from the previous month. Meanwhile, the introduction of the National Living Wage was reported to have contributed to a quicker rate of cost inflation, with firms raising their output prices modestly.

Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:

“Northern Ireland’s private sector notched up its twelfth consecutive month of growth in April. While the rates of expansion in business activity and new orders eased relative to the eighteen-month highs recorded in March, the pace of growth remained relatively strong.  Furthermore, the rates of growth in new orders, business activity and employment amongst local firms exceeded the UK average. The UK’s private sector output expanded at its weakest growth rate in three years in April with the services and construction industries posting subdued rates of activity. Meanwhile UK manufacturing fell into contraction territory for the first time in over three years. The UK economic slowdown is somewhat concerning and if sustained will impact on Northern Ireland in due course.

The main findings of the April survey were as follows:

  • The headline seasonally adjusted Business Activity Index posted 54.2 in April, down from 56.4 in March
  • Activity has now risen on a monthly basis throughout the past year
  • Northern Ireland output rose at a faster pace than seen across the UK as a whole
  • New business also continued to expand at a solid pace in April
  • Growth in new export business was maintained, with the rate of expansion ticking up slightly to the fastest in 21 months
  • Higher output requirements led to a further increase in employment, extending the current sequence of growth to 15 months
  • The rate of job creation accelerated to a three-month high
  • The rate of input cost inflation quickened markedly and was the sharpest for two years
  • Output prices also increased at a faster pace, with the rate of inflation slightly sharper than the UK average

Ulster Bank NI PMI April 2016

Download the PMI Report (April 2016)

Listen to a podcast about the latest PMI

Continue reading

NI economy not as weak as figures suggest

Today’s official figures suggest that the Northern Ireland economy stagnated in the second quarter with the private sector reporting marginal growth.

Meanwhile public sector job losses pushed the overall economy into a slight contraction.

However, while the local economy does face significant challenges, the current position is not as weak as today’s headlines suggest.

Continue reading