DECEMBER PMI: Today sees the release of December data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – pointed to a difficult end to 2022 as new orders fell sharply again and the rate of decline in output accelerated. Employment was unchanged, following 21 months of job creation. Meanwhile, inflationary pressures moderated.
Northern Ireland’s private sector started last year in expansion mode as the post-pandemic economic recovery gathered pace. Last January, businesses were optimistic for the year ahead with the expectation that growth would continue. This proved not to be the case. Largely as a result of the Russian invasion of Ukraine, which added fuel to the cost-of-living crisis, growth petered out and confidence ebbed away. Northern Ireland’s private sector therefore ended the year on a much more negative note. December saw output and orders fall for the eighth successive month. The contraction in output was the steepest in a decade outside of lockdowns. All four sectors posted declines in output and orders although retail, services and construction firms did increase their staffing levels. The good news is that inflationary pressures moderated with firms reporting the weakest rise in input costs in 22 months. As a result, firms raised their prices at their slowest pace in almost two years. But these price rises still exceed anything that occurred in the pre-pandemic era. This time last year, firms were braced for a challenging year, but it turned out much worse than anticipated. December’s report suggests that negative sentiment is receding and that we may have passed peak pessimism. This year, expectations for the 12-months ahead are low but we could see the converse of last year with expectations being exceeded this time around.
The main findings of the December survey were as follows:
The headline seasonally adjusted Business Activity Index fell sharply to 41.6 in December from 46.0 in November, pointing to a much faster reduction in output in the private sector at the end of 2022. In fact, the decline was the steepest since February 2021. The cost of living crisis was reportedly a key factor behind the drop in activity as new orders continued to fall sharply. Activity decreased across all four broad sectors covered by the survey, with the fastest reduction in construction.
Employment was unchanged in December, thereby ending a 21-month sequence of job creation. While some firms were able to expand their staffing levels, others reported voluntary resignations and difficulties recruiting. There were further signs of inflationary pressures moderating in December, with both input costs and output prices rising at the slowest rates since early-2021. That said, prices continued to increase rapidly. Where input costs were up, panellists mentioned higher costs for energy and transportation. Suppliers’ delivery times continued to lengthen, with delays linked to Brexit and postal strikes. Although companies remained downbeat on the prospects for output growth during 2023 due to the cost of living crisis and political uncertainty, sentiment improved to an eight-month high.
Today sees the release of November data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – showed that inflationary pressures and a wider economic slowdown led to further reductions in output and new orders in the Northern Ireland private sector. There were further signs, however, of inflation softening as both input costs and selling prices rose at the weakest rates in 21 months.
Today sees the release of September data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – saw the third quarter of 2022 end with the Northern Ireland private sector remaining deep inside contraction territory. Rates of decline in output and new orders quickened and while employment continued to rise the latest round of job creation was only marginal.
Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – indicated that the Northern Ireland private sector remained in contraction as demand continued to be impacted by intense price pressures. That said, there were further signs of inflation softening. Meanwhile, firms remained pessimistic about the year-ahead outlook and the rate of job creation softened to an 18-month low.
We’ve heard lots of recent comparisons between today and 1976, given the heatwaves and drought that affected both years, and that 2022 is the UK’s driest year since. But whilst we have recently been basking in sunshine and dealing with the impact of the warm weather, it is the cost of heat, light and food for households this winter that should be on all of our minds.
Today sees the release of July data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – signalled that declines in customer demand amid strong inflationary pressures led to further sharp reductions in output and new orders in the Northern Ireland private sector. Rates of inflation remained elevated over the month, despite showing signs of easing. The main positive from the latest survey was a further rise in employment.
Today sees the release of June data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – signalled that output and new orders both fell sharply as severe price pressures caused demand to contract. Business confidence also waned, but companies continued to expand their staffing levels.
Today sees the release of April data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – indicated that substantial inflationary pressures acted to subdue growth of output and new orders, with the rate of job creation also easing at the start of the second quarter.
Today sees the release of March data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by S&P Global – signalled further marked increases in output and new orders, although growth rates eased from February. Meanwhile, near-record increases in input costs and output prices were recorded, with the impact of stronger inflation leading to a sharp drop in confidence.
The NI private sector continued to show signs of growth in output, employment and order books in March, but there is no disguising the impact that the Ukraine / Russian conflict has had on business conditions. This has manifested itself in three key areas – escalating inflation, a slowdown in incoming business, and a significant dent to business confidence.
Today sees the release of February data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – pointed to improved growth momentum, with both new orders and business activity up sharply. Firms were only able to raise employment modestly, however, amid reports of difficulties sourcing staff. Meanwhile, rates of inflation remained elevated but showed further signs of easing.
With concerns over Covid-19 fading fast, NI’s private sector posted a surge in activity in February. Output hit an eight-month high, with all four sectors recording growth for the first time since June last year. Meanwhile, new orders rose at their fastest pace in seven-and-a-half years. Only construction, of the four sectors monitored, failed to record an uplift in new orders last month.
Despite robust demand, employment growth slowed to a 12-month low, with NI posting the slowest rate of job creation of the 12 UK regions. Clearly firms are struggling with skills shortages and are finding it difficult to get suitable candidates to help meet the demand.
Manufacturing was the best performer at a sector level by a significant margin. Output and orders in the sector expanded at record rates while manufacturing firms continued to increase their headcounts to cope with burgeoning order books and mounting backlogs.