Sharpest fall in output since November 2012
Today sees the release of September data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by IHS Markit – indicated that the Northern Ireland private sector moved deeper into contraction, as Brexit uncertainty impacted negatively on firms' operations. Output, new orders and employment all fell at sharper rates, while business sentiment dropped to a new record low.
Commenting on the latest survey findings, Richard Ramsey, Chief Economist Northern Ireland, Ulster Bank, said:
“Deteriorating business conditions was a key theme across the UK and further afield in September, and Northern Ireland was no exception. The latest Ulster Bank NI PMI shows that the pace of decline in output, new orders, employment, exports and expectations all accelerated last month relative to August. Notably, export orders at local firms fell to a 97-month low, which underscores that this is not just a Northern Ireland problem, and that global demand is weakening.
“However, within the UK, the deterioration in private sector activity has been most marked in Northern Ireland. It is the seventh consecutive month that private sector output has fallen here, and the fifth month that all sectors have been in decline.
“Perhaps most notably, construction saw the fastest rates of decline in output, and new orders in the sector are now at an 82-month low. The manufacturing sector also reported its fastest pace of job losses in over 10 years. But the weakness is broad-based, and the largest sector, services, had a particularly difficult month in September with output and orders hitting 81-month lows.
“Looking ahead, Northern Ireland is the only UK region where firms expect output to be lower in 12-months’ time. This reflects the lack of confidence in the local private sector at present resulting from a range of factors, not least ongoing Brexit uncertainty. However, whilst a week is a long time in politics, a year is a very long time in economics, and much can change quickly on both fronts.”
Key Quarterly Data for Q3 2019
- Business Activity = 44.7 (lowest since Q4 2012 = 27 quarter low)
- New Orders = 42.7 (lowest since Q2 2012 = 29 quarter low)
- Employment = 47.9
- Exports = 39.0 (lowest since Q3 2011 =31 quarter low)
Sectoral Business Activity / Output Q3 2019
- Manufacturing = 43.7 (lowest since Q1 2009 = 42 quarter low)
- Services = 45.7 (lowest since Q4 2012 = 27 quarter low)
- Construction = 42.4 (lowest since Q4 2012 = 27 quarter low)
- Retail = 46.0
The September 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