Manufacturing expands at weakest pace since February 2014
Published 02/09/2015 | 02:30
Manufacturing expanded at its weakest level in a year and a half last month, with output, new orders and employment rising at a softer rate.
Companies reported a drop in new orders both at home and abroad, while the number of staff taken on by firms dropped back to its slowest level since July of last year, according to the latest Purchasing Managers' Index (PMI) for the sector.
Manufacturing in the Eurozone eased last month, despite factories barely raising prices. And UK manufacturing growth cooled as export orders fell for a fifth month.
Philip O'Sullivan, economist with specialist bank Investec, said there is no reason to be worried by the Irish data.
"While this is clearly a more downbeat manufacturing PMI release compared to what we have grown accustomed to over the past 18 months or so, we are not overly concerned at this point," he said.
"The sector still has significant tail winds behind it and we still expect to see a strong finish to the year."
The seasonally adjusted PMI posted 53.6 in August, down from 56.7 in July. Above 50 signals expansion, while below that means contraction. It was the weakest improvement in conditions since February 2014.
The rate of expansion in new orders slowed in the month and was the weakest in a year-and-a-half also. Weaker growth of new orders led firms to work through outstanding business.
Employment continued to rise, but the rate of job creation eased over the month. Staffing levels increased at the weakest pace in just over a year.
There were reports that the weakness of the euro against sterling had led some imports to cost more, but lower costs for items including food, plastics and steel were also mentioned.
In the UK, manufacturers blamed the decline in foreign demand on the strong pound, weak sales in the euro area and China's economic slowdown.
The headline manufacturing index slipped to 51.5 from 51.9 in July.