New orders rise at weakest pace in four months
Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – signalled a loss of growth momentum in the Northern Ireland private sector. Although output and new orders continued to rise solidly, rates of expansion in both were weaker than recorded in July. That said, the rate of job creation picked up, as did business confidence. Inflation of both input costs and output prices eased, but remained elevated.
Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:
“We’ve perhaps never seen a year when the weather has played such a big role in the Northern Ireland economy. In the early part of 2018, the Beast from the East disrupted business activity, therefore impacting on output. More recently, the incredibly good weather has been cited as a major factor behind faster rates of growth in the private sector during June and July. Perhaps unsurprisingly, given the milder weather, August saw something of a slowdown.
“Output and new orders growth both eased to a four-month low in August, whilst export orders saw the weakest rate in 10 months, albeit that it was the 26th successive month of growth. Employment fared slightly better, with a modest pick-up in growth from July’s 12-month low. Meanwhile, inflationary pressures eased, according to local firms, but it is worth noting that they remain more marked in Northern Ireland than in any other UK region.
“The August slowdown was evident across the retail, services and construction sectors. While they were all still growing, the uplift in output and their order books slowed significantly. On the other hand, manufacturing saw almost every indicator improve. In particular, the notable growth in new orders bodes well for the months ahead.
“During the next few months, it will become clearer if the latest slowdown is simply related to an easing back from June and July’s weather-related high, or if this is evidence of an underlying weakness emerging. The fact that construction firms expect activity to fall over the next 12 months, suggests that they think it may be the latter.”
The August PMI report for Northern Ireland and the NatWest report for the UK regions are attached for your information. Further PMI material including a chart pack, podcast and infographics are available at www.ulstereconomix.com