Output down for sixth month running in August
Today sees the release of August data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – suggested that Brexit and associated economic uncertainty led to ongoing declines in the Northern Ireland private sector during August. Marked reductions in output and new orders were recorded, while business confidence hit a new low and job shedding intensified.
Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:
“The latest PMI provides further evidence that Northern Ireland’s private sector has entered, or is entering, recession. Output has fallen for the sixth month in a row and exports have declined for the seventh month. Add to this an eighth successive month of falling employment and it is hard to avoid this conclusion.
“All four sectors monitored by the PMI are in decline for the fourth month running according to the latest survey. Perhaps the most concerning elements of August’s report are the pace of deterioration in business conditions within the construction and manufacturing sectors. Construction orders plunged to an 81-month low and have now been falling consistently for 12 months.
“Within manufacturing, both output and orders continue to fall markedly, and significantly this is now impacting on staffing levels. Manufacturers posted their fastest rate of job losses in over seven years during August.
“It should be remembered though that the deterioration in the employment picture is coming from a position of considerable labour market strength. Indeed, many firms continue to cite skills shortages as a barrier to their hiring intentions. The lack of hiring in some cases is therefore not for the want of trying.
“If the PMI’s sentiment indicator is correct though, the labour market will likely deteriorate further over the months ahead. Northern Ireland firms are now their most pessimistic since this started to be tracked almost three years ago. This is particularly the case in the construction sector, with services the only sector where activity is not expected to be lower in a year’s time.”
The August PMI report for Northern Ireland, the NatWest report for the UK regions and the Republic of Ireland’s Construction are attached for your information. Further PMI material including a chart pack, podcast and infographics are available at www.ulstereconomix.com