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.
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.
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 that the Northern Ireland private sector ended the second quarter of 2018 on a positive note, with sharper rises in output and new orders recorded. There were further signs of increasing inflationary pressures, however. Meanwhile, business confidence dipped and was the lowest for almost a year.
Today sees the release of May data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – signalled that growth in the Northern Ireland private sector picked up, with faster increases in output, new orders and employment recorded. Meanwhile, higher fuel costs contributed to a pick-up in the rate of input price inflation and output prices continued to rise sharply.
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 →
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.
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 →
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 →
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 →
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