Northern Ireland PMI slide pack, January 2013

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  • 1.UlsterBankNorthernIreland PurchasingManagersIndex(PMI)IncludesanalysisofGlobal,Eurozone,UK,UKRegions,NI&RepublicofIrelandeconomicperformancebysectorJanuary2013SurveyUpdateIssued11th February2013 RichardRamsey ChiefEconomistNorthernIrelandrichard.ramsey@ulsterbankcm.com

2. PMI SurveysPurchasingManagers Indexes(PMIs)aremonthlysurveysofprivatesectorcompanieswhichprovideanadvanceindicationofwhatishappeningintheprivatesectoreconomybytrackingvariablessuchasoutput,neworders,employmentand pricesacrossdifferentsectors.Indexnumbersarecalculatedfromthepercentagesofrespondents reportinganimprovement,nochangeordeclineonthepreviousmonth.Theseindicesvaryfrom0to100withreadingsof50.0signallingnochangeonthepreviousmonth.Readingsabove50.0signalanincreaseorimprovement;readingsbelow50.0signaladeclineordeterioration.Thegreaterthedivergencefrom50.0thegreater therateofchange(expansionorcontraction).Theindicesareseasonallyadjusted totakeintoconsiderationexpectedvariationsforthetimeofyear,suchassummershutdownsorholidays.50.0=ExpansionDataatasectorlevelaremorevolatileand3monthmovingaverages havebeenusedtomoreaccuratelyidentifythebroadtrends. 3. Global output growth eases from 9-month high withmanufacturing posting its 3rd successive month of growth Global Output - PMI 65Source: Markit Economics 60Expansion 55 50 45Contraction 40 35 30 TotalManufacturingServices 25Jan-07 Jan-08Jan-09 Jan-10Jan-11Jan-12 Jan-13 4. All sectors within the Eurozone are still contractingEurozone PMIs: Output 65Source: Markit Economics Output Indices Expansion 60 55 50 Contraction 45 40 35 30Composite (M&S)Manufacturing Services Construction 25Jan-07Jan-08 Jan-09 Jan-10 Jan-11 Jan-12Jan-13 5. Greece, Australia & France post steepest falls inmanufacturing output. Denmark posts strongest gain PMIs: Manufacturing Output January 2013DenmarkMexico SwitzerlandTurkeyBrazilUK IndiaUSTaiwanRussiaChinaN.Zealand GlobalGermany NI, RoI & UKIreland Netherlands Vietnam NI CanadaPolandSingapore Indonesia South AfricaAustriaEUItaly S.Korea CzechEZ JapanIsraelSpainFranceSource: Markit Economics Output IndicesAustraliaGreece3540 455055 60 65 6. Services output expanding for BRICs, US, Germany, Japan &Ireland. France & Italy posting the steepest contractions PMIs: Services Output January 2013 IndiaIrelandUS*RussiaGermanyEmerging MarketsBrazilChina Global JapanUKEUEZ SpainAustralia NI Source: Markit Economics Output Indices, * US Non-Italy manufacturing which is wider than servicesFrance40 4550 55 6065 7. Divergence between Germany & France is worthwatchingComposite PMIs(Manufacturing & Services ** Excludes Construction**)6560 Expansion5550 Contraction454035Source: Markit Economics PMIs30 Jan-07 Jan-08 Jan-09Jan-10Jan-11 Jan-12Jan-13 8. US remains the best performer relative to China, UK & EZ Composite PMIs (Manufacturing & Services ** Excludes Construction**) 65 Eurozone US (ISM)China UK 60Expansion 55 50Contraction 45 40Source: Markit Economics 35Jan-08 Jan-09Jan-10Jan-11 Jan-12 Jan-13 9. and US manufacturing is expanding at a faster ratethan China Manufacturing PMIs 65US (ISM)ChinaJapan Eurozone 60Expansion 55 50Contraction 45 40 35 30 Source: Markit Economics 25Jan-08 Jan-09 Jan-10Jan-11 Jan-12Jan-13 10. UK & RoI above the expansion threshold whilst the rate ofcontraction eases for Northern IrelandPrivate Sector Business Activity - PMIs**PMI Surveys Exclude Agriculture & Public Sector**65 NIUK RoI60Expansion555045Contraction4035 Source: Markit & Ulster Bank NI PMI: 50 = threshold between expansion / contraction30 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 11. PMI suggests further falls in private sector composite index (combines DFPindices for construction, services & industrial production) in Q4 2012 but growth in Q1? NI Private Sector Output Index Versus NI PMIPSO Q/Q% PMIUB PSO Left Hand Scale UB PMI Right Hand Scale 565 50 mark is the threshold for expansion / contraction with PMI 460 3 Expansion 255 150 045-1-240-3 Contraction35-4 Source: Ulster Bank Private Sector Output (Index 2009 = 100) up to Q3 2012 & Markit Economic, * is January only-5 30 2004 Q12005 Q32007 Q1 2008 Q3 2010 Q1 2011 Q3 2013 Q1* 12. NI output, new orders and employment all see theirpace of contraction ease over the last 3 monthsNI Private Sector Activity 3 month moving average70 Business ActivityNew BusinessEmployment65Expansion60555045 Contraction4035 Source: Markit Economics & Ulster Bank NI PMI30 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 13. Pace of contraction in NI new orders eases with UK flat Private Sector New Orders 3 month moving average 65Orders increasing NI UKRoI 60 55 50 45Orders Contracting 40 35Source: Markit Economics & Ulster Bank NI PMI 30 Jan-Jan- Jan-Jan- Jan-Jan-Jan- Jan- Jan- Jan- Jan-0304 0506 070809 10 11 12 13 14. NIs levels of work outstanding still falling at a rapid ratePrivate Sector Backlogs3 month moving average60NI UKRoIIncreasing555045Decreasing4035 Source: Markit Economics & Ulster Bank NI PMI30 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 15. Export orders post its highest reading since January 2008NI New Export BusinessMonthly Growth Accelerating65 New Export OrdersNo Change60555045 Contraction Accelerating40353025 Source: Markit Economics & Ulster Bank NI PMI20 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 16. PMI underestimated job gains in Q2 & Q3 (relative to official jobssurvey) further job losses signalled in Q4 2012 but growth in Jan-13 PMI Index NI Employment: PMI v QES*Q/Q 60 1.0%*QES is DFPs official Quarterly Employment Survey of thenumber of jobs in NI & includes the public sector 0.8% 55Job0.5% gains0.3% Discontinuity in QES Series 50 0.0%-0.3% 45 -0.5% Job losses-0.8% 40 Source: DFP, Ulster Bank & Markit Economics, PMI-1.0%Index 50.0 denotes threshold between expansion /contraction,PMI 3mth averages except January 2013-1.3%which is based on single month 35 -1.5% Mar-04 Sep-05Mar-07Sep-08 Mar-10 Sep-11 Jan-13 PMI Employment IndexNo Change QES Q/Q 17. Employment gains in the UK, NI & the RoI in January. Thelast time all 3 posted employment gains was November 2007Private Sector Employment Levels Monthly 60NIUK RoIJob Gains 55 50Job Losses 45 40 35Source: Markit Economics & Ulster Bank NI PMI 30Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 18. Input cost inflation accelerates in January with outputprices and charges still falling NI Private Sector Profit Squeeze3 Month Moving Average80 Output PricesInput Prices No Change Profits70squeeze Inflation6050Deflation40 Price of goods & Source: Markit Economics & Ulster Bank NI PMIservices falling30 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 19. RegionalComparisons 20. 2 UK regions post a contraction in January with the NorthEast posting the steepest decline followed by NI Output / Business Activity January 2013 PMI index 6050 = No change Expansion 55 53.851.7 5048.3 Contraction 45 40Source: Markit Economics & Ulster Bank NI PMI 35Wal Y&H EM SE Lon Scot UK SW East NW WM NI NE RoI 21. NI posts sharpest rate of decline over the last 3 months Output / Business Activity 3 months to January 2013PMI Index 50 = No change56Expansion54 53.552 50.650Contraction484644.94442Source: Markit Economics & Ulster Bank NI PMI40 Wal Y&H Lon Scot SE UK SW NW East WM EM NE NI RoI 22. and over the last 12 months Output / Business Activity PMI index12 months to January 2013 50 = No change 55Expansion 51.751.6 50Contraction 4543.7 Source: Markit Economics & Ulster Bank NI PMI 40WM Lon Y&H EM SE UK Wal Scot East NW SW NENI RoI 23. Three English regions report falling employment levelsin January Employment LevelsJanuary 2013 PMI Index 5650 = No changeIncreasing 5453.3 52 51.3 50.7Decreasing 50 48 46 44Source: Markit Economics & Ulster Bank NI PMI 42SE Y&H East EM WM UK Lon Scot NIWal NW NE SW RoI 24. and 5 UK regions (incl. NI) post declines over last 3months Employment LevelsPMI IndexLast 3 months to January 201354 50 = No change52.7Increasing5250.250Decreasing 49.0484644 Source: Markit Economics & Ulster Bank NI PMI42 SE Y&H EM East Scot Wal UK WM SW NE Lon NI NW RoI 25. NI posts the steepest decline in employment over thelast 12 months Employment Levels 12 months to January 2013PMI Index 50 = No change54 Increasing5250.9 50.550 Decreasing48 47.44644Source: Markit Economics & Ulster Bank NI PMI42 EM WM SE Y&H Scot East UK SW Wal Lon NE NWNI RoI 26. SectoralComparisons 27. UK services rebounds in January with manufacturingoutput growth accelerating. Only construction is sub-50UK Business Activity / Output - PMIs 70 Services ManufacturingConstruction Expansion 60 50 Contraction 40 30Source: Markit Economics 20Jan-07 Jan-08Jan-09 Jan-10Jan-11 Jan-12 Jan-13 28. UK composite PMI raised the prospect of negative GDPQ4 reading which was realised with a 0.3% decline UK GDP versus UK Composite PMIPMI Index GDP Q/Q65 1.560 155 0.550 045 -0.540 -135 -1.530 -2Source: ONS & Markit Economics, * refers to Jan-1325 -2.52007 Q1 2008 Q12009 Q1 2010 Q12011 Q12012 Q1 2013 Q1*GDP Q/Q PMIPMI No Change 29. Services & manufacturing remain above 50 in the RoI RoI Business Activity - PMIs3 month moving average 65ManufacturingServicesConstruction No ChangeExpansion 60 55 50Contraction 45 40 35 30 25Source: Markit Economics 20Jan-07 Jan-08Jan-09 Jan-10Jan-11Jan-12Jan-13 30. All sectors in NI contracting.NI Private Sector Output3 month moving average65 Manufacturing ServicesConstruction60Expansion5550Contraction454035 Source: Markit Economics & Ulster Bank NI30 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 31. with services and construction sectors still reportingfalling employment levels NI PMI - Employment Index 3 month moving average 65Manufacturing ServicesConstruction Job Gains 60 55 5