Download - Ulster Bank NI PMI - October 2013
![Page 1: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/1.jpg)
Ulster Bank Northern Ireland Purchasing Managers Index (PMI)
Includes analysis of Global, Eurozone, UK, UK Regions, NI &
Republic of Ireland economic performance by sector
October 2013 Survey Update
Issued 11th
November 2013
Richard Ramsey
Chief Economist Northern Ireland
![Page 2: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/2.jpg)
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.
![Page 3: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/3.jpg)
Global output growth accelerates in October due to the services sector with manufacturing slowing…
Global Output - PMI
25
30
35
40
45
50
55
60
65
May-07 Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
Total Manufacturing Services
Source: Markit Economics
ExpansionC
ontraction
![Page 4: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/4.jpg)
… but the Eurozone experiences the opposite trend with service sector output slowing & manufacturing picking up
Eurozone PMIs: Output
25
30
35
40
45
50
55
60
65
Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13
Composite (M&S) Manufacturing Services Construction
Source: Markit Economics Output Indices Expansion
Contraction
![Page 5: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/5.jpg)
Top performers within manufacturing incl. US, NI & UK. Underperformers incl. Mexico, France, Greece & India
PMIs: Manufacturing Output October 2013
35 40 45 50 55 60 65 70
GreeceIndia
FranceMexico
S.KoreaChina
VietnamBrazilSpain
IndonesiaIsrael*
SingaporeS.Africa
TurkeyEZ
GlobalGermany
ItalyEU
TaiwanAustralia
NetherlandsRussiaAustriaPoland
N.Zealand*Canada
DenmarkIreland
Czech RepublicSwitzerland
JapanUKNI
US
Source: Markit Economics Output Indices, *Sep, for the US ISM is used.
NI, UK & RoI
€
![Page 6: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/6.jpg)
The UK, Ireland & the US post the fastest rate of service sector output growth in October
PMIs: Services Output October 2013
35 40 45 50 55 60 65
IndiaAustralia
SpainItaly
FranceEZ
Emerging MarketsBrazil
RussiaChina
GermanyEU
JapanNI
GlobalUS*
IrelandUK
Source: Markit Economics Output Indices, * US Non-manufacturing which is wider than services
€
![Page 7: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/7.jpg)
All 4 of the largest economies within the eurozone are now expanding but UK & RoI are outperforming them
Composite PMIs (Manufacturing & Services ** Excludes Construction**)
30
35
40
45
50
55
60
65
May-07 Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
Source: Markit Economics PMIs
Contraction
Expansion
![Page 8: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/8.jpg)
The UK, US & China all saw an acceleration in growth in October while the rate of growth eased in the Eurozone
Composite PMIs (Manufacturing & Services ** Excludes Construction**)
35
40
45
50
55
60
65
Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
Eurozone US (ISM) China UK
Source: Markit Economics PMIs, US includes construction
ExpansionC
ontraction
![Page 9: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/9.jpg)
The US, Japan, EZ & China all posted an acceleration in manufacturing activity in October
Manufacturing PMIs
25
30
35
40
45
50
55
60
65
Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
US (ISM) China Japan Eurozone
Source: Markit Economics
Contraction
Expansion
![Page 10: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/10.jpg)
Russia & Brazil post an acceleration in output but pace of contraction continues in India
Composite PMIs (Manufacturing & Services ** Excludes Construction**)
30
35
40
45
50
55
60
65
May-07 Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
Brazil Russia India Emerging Markets No Change
Source: Markit Economics
Contraction
Expansion
![Page 11: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/11.jpg)
… with Australia’s service sector still contracting though manufacturing sector continues to improve
Australia - PMI
30
35
40
45
50
55
60
65
May-07 Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
Manufacturing Services No Change
Source: Markit Economics PMIs
Contraction
Expansion
![Page 12: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/12.jpg)
NI, UK & the RoI all post strong rates of growth in October
Private Sector Business Activity - PMIs
30
35
40
45
50
55
60
65
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
NI UK RoI
Source: Markit & Ulster Bank NI PMI50 = threshold between expansion / contraction
Expansion
Contraction
**PMI Surveys Exclude Agriculture & Public Sector**
![Page 13: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/13.jpg)
PMI suggests growth in DFP’s new private sector composite index (combines indices for construction, services, agriculture & industrial production) in Q2, Q3 & Q4
NI Private Sector Output Index Versus NI PMI
-6-5-4
-3-2-1012
345
2003 Q2 2004 Q4 2006 Q2 2007 Q4 2009 Q2 2010 Q4 2012 Q2 2013 Q4*
PSO Q/Q%
30
35
40
45
50
55
60
65
PMI NICEI Left Hand Scale PMI Right Hand Scale
Source: New DFP Northern Ireland Composite Economic Index (NICEI) & Ulster Bank / Markit Economics NI PMI, * for PMI refers to October
50 mark is the threshold for expansion / contraction with PMI
Expansion
Contraction
![Page 14: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/14.jpg)
NI firms report an increase in business activity, new orders & employment in October
NI Private Sector ActivityMonthly
30
35
40
45
50
55
60
65
70
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
Business Activity New Business Employment
Source: Markit Economics & Ulster Bank NI PMI
ExpansionC
ontraction
![Page 15: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/15.jpg)
Forward looking indicators suggest more growth in all three economies in the months ahead
Private Sector New OrdersMonthly
30
35
40
45
50
55
60
65
Oct-03 Oct-05 Oct-07 Oct-09 Oct-11 Oct-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Orders increasing
Orders C
ontracting
![Page 16: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/16.jpg)
Surge in demand is leading to backlogs of work
Private Sector Backlogs3 month moving average
30
35
40
45
50
55
60
Oct-03 Jun-05 Feb-07 Oct-08 Jun-10 Feb-12 Oct-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Increasing D
ecreasing
![Page 17: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/17.jpg)
NI firms post their 4th successive increase in export orders in October
NI New Export Business
20
30
40
50
60
70
Oct-03 Oct-05 Oct-07 Oct-09 Oct-11 Oct-13
New Export Orders No Change
Source: Markit Economics & Ulster Bank NI PMI
Expansion C
ontraction
![Page 18: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/18.jpg)
PMI underestimated job gains in 2012 (relative to official jobs survey). PMI for Q3 signals fastest rate of jobs growth since Q4 2007
NI Employment: PMI v QES**
35
40
45
50
55
60
2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4*
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
**QES is DFP's official Quarterly Employment Survey of the number of jobs in NI & includes public sector
Discontinuity in QES Series
Job losses
Job gains
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to October only
![Page 19: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/19.jpg)
Firms within the UK, RoI & NI all experienced a faster rate of jobs growth in October
Private Sector Employment LevelsMonthly
30
35
40
45
50
55
60
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
NI UK RoI
Source: Markit Economics & Ulster Bank NI PMI
Job Gains
Job Losses
![Page 20: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/20.jpg)
Private sector’s profitability squeeze remains but pricing power is on the rise
NI Private Sector Profit Squeeze3 Month Moving Average
30
40
50
60
70
80
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
Output Prices Input Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI PMI
Profits squeeze
Price of goods & services rising
![Page 21: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/21.jpg)
Regional Comparisons
![Page 22: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/22.jpg)
PMIs experience an Indian summer in October with strong growth reported everywhere…
Output / Business ActivityOctober 201350 = No change
57.658.8
61.5
40
45
50
55
60
65
70
Lon EM SE SW NW UK East Wal Y&H WM Scot NI NE RoI
PMI Index
ExpansionC
ontractionSource: Markit Economics & Ulster Bank NI PMI
![Page 23: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/23.jpg)
…all the UK regions post growth over the last 3 months
Output / Business Activity 3 months to October 2013
50 = No change
58.257.2
60.8
40
45
50
55
60
65
Lon NW SE EM SW UK East Y&H Wal WM NI Scot NE RoI
PMI Index
Source: Markit Economics & Ulster Bank NI PMI
Expansion
Contraction
![Page 24: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/24.jpg)
… and NI is the last UK region to finally post a rise in output over the last 12 months
Output / Business Activity 12 months to October 2013
50 = No change
54.9
53.6
50.9
45
50
55
60
Lon Wal NW Y&H SE UK EM Scot SW East WM NE NI RoI
PMI Index
ExpansionC
ontractionSource: Markit Economics & Ulster Bank NI PMI
![Page 25: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/25.jpg)
All the UK regions and the Republic of Ireland post employment growth in October …
Employment LevelsOctober 201350 = No change
55.5 55.7
53.1
46
48
50
52
54
56
58
60
Lon SE SW WM UK East Wal NW Scot NI Y&H NE EM RoI
PMI Index
IncreasingD
ecreasingSource: Markit Economics & Ulster Bank NI PMI
![Page 26: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/26.jpg)
… and over the last 3 months to OctoberEmployment Levels
3 months to October 201350 = No change
52.1
54.7
53.3
44
46
48
50
52
54
56
58
WM NW SW Lon East Scot SE UK Wal NI Y&H EM NE RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
![Page 27: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/27.jpg)
NI posts a marginal decline in employment & RoI the sharpest rise over the last 12 months
Employment Levels12 months to October 2013
50 = No change
51.6
53.0
49.6
46
48
50
52
54
WM SE East SW Lon Scot Wal UK NW EM Y&H NE NI RoI
PMI Index
IncreasingD
ecreasing
Source: Markit Economics & Ulster Bank NI PMI
![Page 28: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/28.jpg)
Sectoral Comparisons
![Page 29: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/29.jpg)
All three broad UK sectors maintain strong rates of growth in October with services growth at a 16-year high
UK Business Activity / Output - PMIs
20
30
40
50
60
70
May-07 Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
Services Manufacturing Construction
Source: Markit Economics
ExpansionC
ontraction
![Page 30: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/30.jpg)
UK economic growth accelerates in Q2, Q3 & Q4
UK GDP versus UK Composite PMIUK Composite includes Construction
25
30
35
40
45
50
55
60
65
2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4*
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 October 2013 PMI only
![Page 31: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/31.jpg)
All three sectors of the RoI economy post an acceleration in their growth rates in October
RoI Business Activity - PMIsMonthly
20
25
30
35
40
45
50
55
60
65
May-07 Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
Manufacturing Services Construction No Change
Source: Markit Economics
Contraction
Expansion
![Page 32: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/32.jpg)
All three broad sectors in NI reported increased levels of business activity over the last 3 months
Northern Ireland Private Sector Output 3 month moving average
30
35
40
45
50
55
60
65
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
Manufacturing Services Construction
Source: Markit Economics & Ulster Bank NI PMI
Expansion
Contraction
![Page 33: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/33.jpg)
…with all sectors also reporting job gains over the last 3 months
NI PMI - Employment Index 3 month moving average
25
30
35
40
45
50
55
60
65
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
Manufacturing Services Construction
Source: Markit Economics & Ulster Bank NI PMI
Job Gains
Job Losses
![Page 34: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/34.jpg)
NI’s manufacturing sector posts an acceleration in employment & output growth over the last 3 months
NI Manufacturing Activity3 month moving average
25
30
35
40
45
50
55
60
65
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
Business activity New Orders Employment
Source: Markit Economics & Ulster Bank NI PMI
Grow
th acceleratingC
ontraction accelerating
![Page 35: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/35.jpg)
The UK, RoI and NI all witness an acceleration in manufacturing output during the last 3 months
Manufacturing Output3 month moving average
30
35
40
45
50
55
60
65
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
![Page 36: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/36.jpg)
The UK posts the strongest growth in new orders
Manufacturing New Orders3 month moving average
25
30
35
40
45
50
55
60
65
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
![Page 37: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/37.jpg)
N.Ireland is outperforming its European competitors
Manufacturing Output - PMI
20
30
40
50
60
70
May-07 Apr-08 Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
RoI Italy Spain Greece NI
Source: Markit Economics PMIs
Contraction
Expansion
![Page 38: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/38.jpg)
Cost price inflation remains for local manufacturing firms but pricing power is improving with increased demand
NI Manufacturing Input & Output Inflation3 month moving average
30
40
50
60
70
80
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
No Change Input Costs Output Prices
InflationD
eflation
Source: Markit Economics & Ulster Bank NI PMI
Profits squeeze
![Page 39: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/39.jpg)
PMI underestimated manufacturing job surge in Q2. PMI suggests further job gains in Q3 & Q4 2013
NI Manufacturing Employment: PMI v QES**
30
35
40
45
50
55
60
65
2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4*
PMI Index
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
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 firms
Source: DFP, Ulster Bank & Markit Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to October only
![Page 40: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/40.jpg)
Recent growth in NI service sector output / orders is feeding through into higher levels of employment…
NI Service Sector (excludes Retail)3 month moving average
30
35
40
45
50
55
60
65
70
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
Business activity New Orders Employment
Source: Markit Economics & Ulster Bank NI
Grow
th acceleratingC
ontraction accelerating
![Page 41: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/41.jpg)
All three economies post an acceleration in services output growth in the 3 months to October…
Services Output (excluding Retail)3 month moving average
30
35
40
45
50
55
60
65
70
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
![Page 42: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/42.jpg)
… and strong new orders growth too
Services New Orders (excluding Retail ) 3 month moving average
30
40
50
60
70
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
UK NI RoI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
![Page 43: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/43.jpg)
Output prices within service sector firms rise at their fastest rate in October in over 5 years
NI Services Input & Output Inflation3 month moving average
30
40
50
60
70
80
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
No Change Input Costs Output Prices
InflationD
eflation
Source: Markit Economics & Ulster Bank NI
Profits squeeze
![Page 44: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/44.jpg)
…with employment growth accelerating in the UK & NI whilst remaining strong in the RoI
Services Employment3 month moving average
30
35
40
45
50
55
60
65
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
UK RoI NI No Change
Source: Markit Economics & Ulster Bank NI PMI
Contraction
Expansion
![Page 45: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/45.jpg)
In Q3 the services PMI finally shows quarterly employment growth for the first time since Q1 2008
NI Services Employment: PMI v QES*
40
45
50
55
60
65
2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4*
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, * for PMI refers to October only
![Page 46: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/46.jpg)
Retailers summer boom extends into October
Northern Ireland Retail PMI3 monthly average
25
35
45
55
65
75
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
Business Activity New Orders Backlogs No Change
Source: Markit Economics & Ulster Bank NI PMI
Expansion
Contraction
![Page 47: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/47.jpg)
Local retailers maintain pricing power in October
NI Retail Input & Output Inflation3 month moving average
30
40
50
60
70
80
90
Oct-04 Apr-06 Oct-07 Apr-09 Oct-10 Apr-12 Oct-13
Input Costs Output Prices No Change
InflationD
eflation
Source: Markit Economics & Ulster Bank NI
Profits squeeze
![Page 48: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/48.jpg)
NI construction sector reports growth in output & employment over the last 3 months but dip in new orders
NI Construction PMI3 month moving average
20
30
40
50
60
Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
Output New Orders Employment
Source: Markit Economics, Ulster Bank PMI
ExpansionC
ontraction
50 = No change
![Page 49: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/49.jpg)
…but output prices have stopped falling
NI Construction Sector Profits Squeeze3 month moving average
20
30
40
50
60
70
Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
PMI Index
Input Prices Output Prices No Change
Source: Markit Economics & Ulster Bank PMI
InflationD
eflation
![Page 50: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/50.jpg)
NI’s construction PMI posted its first quarter of employment growth in Q3 2013 since Q4 2007
NI Construction Employment: PMI v QES**
20
25
30
35
40
45
50
55
60
65
2003 Q4 2005 Q4 2007 Q4 2009 Q4 2011 Q4 2013 Q4*
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 Economics, PMI Index 50.0 denotes threshold between expansion / contraction, * for PMI refers to October only
![Page 51: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/51.jpg)
Construction output accelerates in the UK, RoI and NI over the last 3 months
Construction Sector Output - PMI3 month moving average
20
30
40
50
60
Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
PMI Index
NI UK RoI
Source: Markit Economics
ExpansionC
ontraction
![Page 52: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/52.jpg)
New orders growth accelerating in the UK & RoI but dips in NI
Construction Sector New Orders - PMI3 month moving average
20
30
40
50
60
Mar-09 Feb-10 Jan-11 Dec-11 Nov-12 Oct-13
PMI Index
NI UK RoI
Source: Markit Economics
ExpansionC
ontraction
![Page 53: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/53.jpg)
Opportunities for NI firms within GB market. House building sector expanding at its fastest rate in almost 10 years…
UK Construction Activity - PMIs3 month moving average
20
30
40
50
60
70
Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13
Housing Activity Commercial Activity Civil Engineering Activity
Source: Markit Economics
ExpansionC
ontraction
![Page 54: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/54.jpg)
…with opportunities returning within the RoI too
Republic of Ireland Construction Activity - PMI3 month moving average
20
30
40
50
60
70
Feb-07 Dec-07 Oct-08 Aug-09 Jun-10 Apr-11 Feb-12 Dec-12 Oct-13
Housing Activity Commercial Activity Engineering Activity
Source: Markit Economics & Ulster Bank
ExpansionC
ontraction
50 = No change
![Page 55: Ulster Bank NI PMI - October 2013](https://reader033.vdocument.in/reader033/viewer/2022060108/554d6cb1b4c905f6388b5844/html5/thumbnails/55.jpg)
Slide 55
Disclaimer
This document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank")
and is not intended for any other person.
It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service in any jurisdiction where the required authorisation is not held.
Ulster Bank and/or its associates and/or its employees may have a position or engage in transactions in any of the instruments mentioned.
The information including any opinions expressed and the pricing given,
is indicative,
and constitute our judgement at time of publication and are subject to change without notice.
The information contained herein should not be construed as advice,
and is not intended to be construed as such.
This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained here without seeking specific advice on matters that concern them.
Ulster Bank make no representations or warranties with respect to the information and disclaim all liability for use the recipient or their advisors make of the information.
Over-the-counter (OTC) derivates can involve a number of significant and complex risks which are dependent on the terms of the particular transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incur substantial costs if you wish to close out your position.
Calls may be recorded.