Exports boost for manufacturing as overall growth hit by slowdown
New business in the manufacturing industry rose sharply last month, even though growth overall slowed to a four-month low.
There was also a marked rise in new export business during the month, according to the latest Purchasing Managers' Index (PMI) for the sector.
Philip O'Sullivan, economist with specialist bank Investec, which produces the data, said that despite a recent moderation, the level of new orders continues to increase thanks to healthy demand from international clients.
"More than twice as many firms reported growth in new export orders as against those whose experienced a contraction in demand," Mr O'Sullivan said. "Notwithstanding the continued increases in demand, the rate of growth in backlogs of work moderated to the slowest in the current six-month sequence of expansion."
He said this was likely explained by a combination of the increased resources available to manufacturers as well as using products already made to meet orders.
The seasonally-adjusted PMI posted 53.6 in March, above the 50 mark that signals the change from contraction to expansion.
But it was down fractionally from the 53.8 recorded in February. The PMI has now fallen for three successive months and last month signalled the weakest improvement since October. Meanwhile, British manufacturing lost some of its momentum last month, as export orders grew more slowly and demand for consumer goods faltered against a backdrop of rising inflation pressures.
Sterling's tumble following June's vote to leave the European Union helped manufacturers enjoy their fastest annual growth in three years during the final quarter of last year.
March's manufacturing PMI slipped to 54.2 from a downwardly revised 54.5 in February.
Separately, research from the Economic and Social Research Institute (ESRI) found the UK accounts for more than 40pc of exports for Irish-owned firms.
The research also found that diversifying export products and markets plays a major role in driving growth for domestic firms and that investing in knowledge-based capital can help firms increase productivity performance. Most exporters sell a small number of products to few markets, with almost half of Irish manufacturing firms exporting fewer than five products.
Irish-owned firms are also less diversified than foreign-owned firms. The report states that while specialisation among exporters can be a positive, as long as it is in an area of high current demand and future growth prospects, a focus on a narrow range of markets or products brings exposure to risk.