Monday 29 December 2014

Ireland bucks the eurozone trend with fresh signs of growth

Published 03/01/2013 | 05:00

The latest NCB Manufacturing Purchasing Managers Index (PMI) has something for the glass-half-full merchants and something for their glass-half-empty counterparts.

The latest PMI for December stands at 51.4 and signals that the economy has expanded for the 10th month in a row.

Optimists will be delighted that the evidence suggests this part of the economy is still motoring. Ireland was the only country in the eurozone to post growth in December, which makes the performance all the more extraordinary.

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Still, there was a surprisingly good showing from some of our largest trading partners including Britain and the US. Growing demand from the US was reported as a factor in December's growth.

We have long been much more dependent on these economies than other eurozone countries so we should not be too surprised that we are out of step with the other eurozone states.

Pessimists will be worried that the December reading was the lowest since August. That suggests we are indeed feeling the pain.

Those of a gloomy disposition will also note that the rate of input cost inflation remained sharp last month as energy and fuel costs soar.

Those rising input costs have led manufacturers to increase their charges after a marginal fall in November. This is no flash in the pan: output prices have now increased in three of the last four months.

The economy has had a great run. The big question is whether it is now picking up steam or slowing down. As usual, time will tell.

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