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Slide pack re the Ulster Bank Northern Ireland Purchasing Managers Index February 2013 (published 11th March, 2013)
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Ulster Bank Northern Ireland Purchasing Managers Index (PMI)
Includes analysis of Global, Eurozone, UK, UK Regions, NI &
Republic of Ireland economic performance by sector
February 2013 Survey Update
Issued 11th
March 2013
Richard Ramsey
Chief Economist Northern Ireland
PMI SurveysPurchasing Managers’
Indexes (PMIs) are monthly surveys of private sector companies
which provide an advance indication of what is happening in the private sector economy
by tracking variables such as output, new orders, employment and
prices across different
sectors.
Index numbers are calculated from the percentages of respondents
reporting an
improvement, no change or decline on the previous month. These indices vary from 0 to
100 with readings of 50.0 signalling no change on the previous month. Readings above
50.0 signal an increase or improvement; readings below 50.0 signal a decline or
deterioration. The greater the divergence from 50.0 the greater
the rate of change
(expansion or contraction). The indices are seasonally adjusted
to take into consideration
expected variations for the time of year, such as summer shutdowns or holidays.
< 50.0 = Contraction 50.0 = No Change > 50.0 = Expansion
Data at a sector level are more volatile and 3‐month moving averages
have been used to
more accurately identify the broad trends.
Global output growth eases in February due largely to manufacturing sector
Global Output - PMI
25
30
35
40
45
50
55
60
65
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Total Manufacturing Services
Source: Markit Economics
ExpansionC
ontraction
All sectors within the Eurozone are still contracting
Eurozone PMIs: Output
25
30
35
40
45
50
55
60
65
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Composite (M&S) Manufacturing Services Construction
Source: Markit Economics Output Indices Expansion
Contraction
Greece, France & Italy post steepest falls in manufacturing output. Denmark posts strongest gain
PMIs: Manufacturing Output February 2013
35 40 45 50 55 60 65
GreeceFrance
ItalyIsrael**
AustraliaSpain
EZJapan
EUSingapore
AustriaPoland
VietnamUK
S.KoreaCzech
IndonesiaNetherlands
TaiwanGermany
ChinaIreland
CanadaGlobal
South AfricaNI
RussiaTurkey
BrazilMexico
IndiaSwitzerland
USN.Zealand*
Denmark
Source: Markit Economics Output Indices, * January, **December
NI, RoI & UK
Services output expanding for BRICs, US, Germany, Japan, UK & Ireland. France & Italy posting the steepest declines
PMIs: Services Output February 2013
40 45 50 55 60
ItalyFranceSpain
NIEZ
AustraliaEU
JapanUK
ChinaBrazil
Emerging MarketsGlobalIreland
IndiaGermany
RussiaUS*
Source: Markit Economics Output Indices, * US Non-manufacturing which is wider than services
€
The 2nd, 3rd & 4th largest economies within the eurozone are contracting at a rapid rate
Composite PMIs (Manufacturing & Services ** Excludes Construction**)
30
35
40
45
50
55
60
65
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Source: Markit Economics PMIs
Contraction
Expansion
US remains the best performer relative to China, UK & EZ
Composite PMIs (Manufacturing & Services ** Excludes Construction**)
35
40
45
50
55
60
65
Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Eurozone US (ISM) China UK
Source: Markit Economics
ExpansionC
ontraction
… and US manufacturing is expanding at a faster rate than China
Manufacturing PMIs
25
30
35
40
45
50
55
60
65
Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
US (ISM) China Japan Eurozone
Source: Markit Economics
Contraction
Expansion
UK & RoI see their rates of growth ease in February whilst the rate of contraction eases for Northern Ireland
Private Sector Business Activity - PMIs
30
35
40
45
50
55
60
65
Feb-04 Aug-05 Feb-07 Aug-08 Feb-10 Aug-11 Feb-13
NI UK RoI
Source: Markit & Ulster Bank NI PMI: 50 = threshold between expansion / contraction
Expansion
Contraction
**PMI Surveys Exclude Agriculture & Public Sector**
PMI suggests further private sector composite index (combines DFP indices for construction, services & industrial production) in Q1 2013 to be flat
NI Private Sector Output Index Versus NI PMI
-5
-4
-3
-2
-1
0
1
2
3
4
5
2004 Q1 2005 Q3 2007 Q1 2008 Q3 2010 Q1 2011 Q3 2013 Q1*
PSO Q/Q%
30
35
40
45
50
55
60
65PMI
UB PSO Left Hand Scale UB PMI Right Hand Scale
Source: Ulster Bank Private Sector Output (Index 2009 = 100) up to Q3 2012 & Markit Economics, * Jan&Feb average
50 mark is the threshold for expansion / contraction with PMI
Expansion
Contraction
NI output, new orders and employment all see their pace of contraction ease over the last 3 months
NI Private Sector Activity3 month moving average
30
35
40
45
50
55
60
65
70
Feb-04 Aug-05 Feb-07 Aug-08 Feb-10 Aug-11 Feb-13
Business Activity New Business Employment
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
Pace of contraction in NI new orders eases
Private Sector New Orders3 month moving average
30
35
40
45
50
55
60
65
Feb-03 Oct-04 Jun-06 Feb-08 Oct-09 Jun-11 Feb-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Orders increasing
Orders C
ontracting
NI’s levels of work outstanding still falling at a rapid rate but the pace of decline is easing
Private Sector Backlogs3 month moving average
30
35
40
45
50
55
60
Feb-03 Oct-04 Jun-06 Feb-08 Oct-09 Jun-11 Feb-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Increasing D
ecreasing
Export orders post its best February reading in 6 years
NI New Export BusinessMonthly
20
25
30
35
40
45
50
55
60
65
Feb-03 Feb-05 Feb-07 Feb-09 Feb-11 Feb-13
New Export Orders No Change
Source: Markit Economics & Ulster Bank NI PMI
Grow
th AcceleratingC
ontraction Accelerating
PMI underestimated job gains in Q2 & Q3 (relative to official jobs survey) further job losses signalled in Q4 2012 but flat in Jan/Feb-13
NI Employment: PMI v QES*
35
40
45
50
55
60
Mar-04 Sep-05 Mar-07 Sep-08 Mar-10 Sep-11 Feb-13
PMI Index
-1.5%
-1.3%
-1.0%
-0.8%
-0.5%
-0.3%
0.0%
0.3%
0.5%
0.8%
1.0%Q/Q
PMI Employment Index No Change QES Q/Q
Discontinuity in QES Series
Job losses
Job gains
*QES is DFP's official Quarterly Employment Survey of the number of jobs in NI & includes the public sector
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages except February 2013 which is based on average of January & February
The UK, RoI and NI all see a fall in their employment indices with NI posting a marginal decline in staffing levels
Private Sector Employment LevelsMonthly
30
35
40
45
50
55
60
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Job Gains
Job Losses
Input cost inflation eases in February (but up over last 3 months) with output prices and charges still falling
NI Private Sector Profit Squeeze3 Month Moving Average
30
40
50
60
70
80
Feb-04 Aug-05 Feb-07 Aug-08 Feb-10 Aug-11 Feb-13
Output Prices Input Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI PMI
Profits squeeze
Price of goods & services falling
Regional Comparisons
3 UK regions post a contraction in February with NI posting the steepest decline followed by the North East…
Output / Business ActivityFebruary 2013
50 = No change
50.8
48.4
51.9
35
40
45
50
55
Wal Scot NW East SE EM Y&H Lon UK WM SW NE NI RoI
PMI index
ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
NI posts sharpest rate of decline over the last 3 months…
Output / Business Activity 3 months to February 2013
50 = No change
47.2
50.7
52.9
40
42
44
46
48
50
52
54
56
Wal Y&H Scot East Lon SE EM WM UK NW SW NE NI RoI
PMI Index
Source: Markit Economics & Ulster Bank NI PMI
Expansion
Contraction
……and over the last 12 months
Output / Business Activity 12 months to February 2013
50 = No change
51.651.4
44
40
45
50
55
Lon WM Y&H EM Wal Scot SE UK East NW SW NE NI RoI
PMI index
ExpansionC
ontraction
Source: Markit Economics & Ulster Bank NI PMI
Two English regions & NI report falling employment levels in February …
Employment LevelsFebruary 2013
50 = No change
50.9
49.0
52.1
42
44
46
48
50
52
54
SE East WM Lon EM Wal UK Scot NW NE SW NI Y&H RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
…and 4 UK regions (incl. NI) post declines over last 3 months…
Employment LevelsLast 3 months to February 2013
50 = No change
49.3
50.6
52.5
42
44
46
48
50
52
54
SE EM East WM Y&H Wal Scot UK Lon NE NW SW NI RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
NI posts the steepest decline in employment over the last 12 months
Employment Levels12 months to February 2013
50 = No change
50.551.2
47.6
42
44
46
48
50
52
54
EM WM SE East Scot Y&H UK SW Wal Lon NW NE NI RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
Sectoral Comparisons
UK service sector growth accelerates in February, but manufacturing and construction post contractions
UK Business Activity / Output - PMIs
20
30
40
50
60
70
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Services Manufacturing Construction
Source: Markit Economics
ExpansionC
ontraction
UK composite PMI suggests Q1 2013 GDP growth will be marginal at best
UK GDP versus UK Composite PMI
25
30
35
40
45
50
55
60
65
2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1*
PMI Index
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5GDP Q/Q
GDP Q/Q PMI PMI No Change
Source: ONS & Markit Economics, * refers to January & February
Services & manufacturing remain above 50 in the RoI
RoI Business Activity - PMIs3 month moving average
20
25
30
35
40
45
50
55
60
65
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Manufacturing Services Construction No Change
Source: Markit Economics
ExpansionC
ontraction
All sectors in NI contracting (3 month average)….NI Private Sector Output
3 month moving average
30
35
40
45
50
55
60
65
Feb-04 Aug-05 Feb-07 Aug-08 Feb-10 Aug-11 Feb-13
Manufacturing Services Construction
Source: Markit Economics & Ulster Bank NI
Expansion
Contraction
… with services and construction sectors still reporting falling employment levels
NI PMI - Employment Index 3 month moving average
25
30
35
40
45
50
55
60
65
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Manufacturing Services Construction
Source: Markit Economics & Ulster Bank NI PMI
Job Gains
Job Losses
Manufacturing posts employment and new orders growth over the last three months
NI Manufacturing Activity3 month moving average
25
30
35
40
45
50
55
60
65
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Business activity New Orders Employment
Source: Markit Economics & Ulster Bank NI PMI
Grow
th acceleratingC
ontraction accelerating
UK manufacturing output growth eases in the 3 months to February
Manufacturing Output3 month moving average
30
35
40
45
50
55
60
65
Feb-04 Aug-05 Feb-07 Aug-08 Feb-10 Aug-11 Feb-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
NI posts the strongest growth in new orders
Manufacturing New Orders3 month moving average
25
30
35
40
45
50
55
60
65
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
N.Ireland manufacturing catching-up with economies elsewhere
Manufacturing Output - PMI3 month moving average
20
30
40
50
60
70
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
China Germany US NI UK
Source: Markit Economics PMIs
Contraction
Expansion
Ireland is still outperforming its Eurozone partners & NI
Manufacturing Output - PMI
20
30
40
50
60
70
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
RoI Italy Spain Greece NI
Source: Markit Economics PMIs, NI is 3 month moving average
Contraction
Expansion
Cost price inflation easing for local manufacturing firms and output prices are rising (return of pricing power)
NI Manufacturing Input & Output Inflation3 month moving average
30
40
50
60
70
80
Feb-04 Aug-05 Feb-07 Aug-08 Feb-10 Aug-11 Feb-13
No Change Input Costs Output Prices
InflationD
eflation
Source: Markit Economics & Ulster Bank NI
Profits squeeze
PMI signals no major job losses in Q4 & growth in Q1 (Feb- 13) but FG Wilson announcement still to take effect
NI Manufacturing Employment: PMI v QES*
30
35
40
45
50
55
60
65
Mar-04 Sep-05 Mar-07 Sep-08 Mar-10 Sep-11 Feb-13
PMI Index
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Q/Q
PMI Employment Index No Change QES Q/Q
Source: DFP, Ulster Bank & Markit PMI Index 50 denotes threshold between expansion / contraction,PMI 3mth averages except Jan-13 (monthly)
Discontinuity in QES Series
Job losses
Job gains
*QES is DFP's official Quarterly Employment Survey of the number of jobs in NI firms
RoI & UK growth continues while NI still posts declines in output
Services Output (excluding Retail)3 month moving average
30
35
40
45
50
55
60
65
70
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
New orders growth slowing in the RoI and remains subdued in the UK. Meanwhile NI still contracting
Services New Orders (excluding Retail ) 3 month moving average
30
40
50
60
70
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
…with employment levels still falling in NI over the last three months (but growth returned in January)
Services Employment3 month moving average
30
35
40
45
50
55
60
65
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
UK RoI NI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
The PMI signals modest employment declines for the service sector in Q4. But PMI includes private sector only
NI Services Employment: PMI v QES*
40
45
50
55
60
65
Mar-04 Sep-05 Mar-07 Sep-08 Mar-10 Sep-11 Feb-13
PMI Index
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
Q/Q
PMI Employment Index No Change QES Q/Q
Discontinuity in QES Series
Job losses
Job gains
*QES is DFP's official Quarterly Employment Survey of the number of jobs in NI and includes the public sector
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction,PMI 3mth averages except February 2013 which is based on average of January & February
Local retailers still reporting falling orders & activity but pace of decline has eased
Northern Ireland Retail PMI3 monthly average
25
35
45
55
65
75
Feb-04 Aug-05 Feb-07 Aug-08 Feb-10 Aug-11 Feb-13
Business Activity New Orders Backlogs No Change
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
Profits squeeze on local retailers remains
NI Retail Input & Output Inflation3 month moving average
30
40
50
60
70
80
90
Feb-04 Aug-05 Feb-07 Aug-08 Feb-10 Aug-11 Feb-13
Input Costs Output Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI
Profits squeeze
NI construction sector still in the midst of a severe downturn
NI Construction PMI3 month moving average
20
30
40
50
60
Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11 Jul-12 Feb-13
Output New Orders Employment
Source: Markit Economics, Ulster Bank PMI
ExpansionC
ontraction
50 = No change
…with profits squeeze continuing NI Construction Sector Profits Squeeze
3 month moving average
20
30
40
50
60
70
Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11 Jul-12 Feb-13
PMI IndexInput Prices Output Prices No Change
Source: Markit Economics & Ulster Bank PMI
InflationD
eflation
NI PMI has been a reasonably good predictor of actual job losses in the official employment surveys (QES)
NI Construction Employment: PMI v QES
20
25
30
35
40
45
50
55
60
65
Mar-04 Sep-05 Mar-07 Sep-08 Mar-10 Sep-11 Feb-13
PMI Index
-10.0%
-7.5%
-5.0%
-2.5%
0.0%
2.5%
5.0%
Q/Q
PMI Employment Index No Change QES Q/Q
Discontinuity in QES Series
Job losses
Job gains
*QES is NI's official Quarterly Employment Survey of the no. of jobs in NI firms
Source: DFP, Ulster Bank & Markit PMI Index 50 denotes threshold between expansion / contraction,PMI 3mth averages except Feb-13 (average of Jan & Feb)
UK, RoI & NI all post contractions in construction output
Construction Sector Output - PMI3 month moving average
20
30
40
50
60
Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11 Jul-12 Feb-13
PMI Index
NI UK RoI
Source: Markit Economics
ExpansionC
ontraction
… and with new orders falling in NI, UK & RoI Construction Sector New Orders - PMI
3 month moving average
20
30
40
50
60
Jan-09 Aug-09 Mar-10 Oct-10 May-11 Dec-11 Jul-12 Feb-13
PMI Index
NI UK RoI
Source: Markit Economics
ExpansionC
ontraction
Growth opportunities for NI firms within GB will wane as activity eases
UK Construction Activity - PMIs3 month moving average
20
30
40
50
60
70
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Housing Activity Commercial Activity Civil Engineering Activity
Source: Markit Economics
ExpansionC
ontraction
Lack of opportunities in the RoI with all construction sub-sectors declining in February
Republic of Ireland Construction Activity - PMI3 month moving average
20
30
40
50
60
70
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13
Housing Activity Commercial Activity Engineering Activity
Source: Markit Economics & Ulster Bank
ExpansionC
ontraction
50 = No change
Slide 52
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is indicative,
and constitute our judgement at time of publication and are subject to change without notice.
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and is not intended to be construed as such.
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