Wednesday 18 October 2017

Manufacturing growth continued in February as companies reported strong demand

Ailish O'Hora

Ailish O'Hora

THE rate of growth in the manufacturing sector improved last month as companies reported strong demand for products and added on new clients.

The latest NCB manufacturing Purchasing Managers Index rose to 51.5 last month, up from 50.3 in January.

Any figure over 50 signals growth in a sector, while a figure under 50 indicates contraction.

NCB said that new orders returned to growth last month after a small dip in January - its first negative reading in 12 months.

Employment returned to growth after a fall in January, driven by higher demand.

However, input costs were also higher due to supply shortages.

''With the headline PMI reading pointing to a 12th successive month of growth for the Irish manufacturing sector, and the rate of expansion improving from the nine month low in January, this is a solid outturn,'' said NCB chief economist Philip O'Sullivan.

Meanwhile, eurozone manufacturing activity appeared no closer to recovery last month, when a dire performance in France offset a return to growth in Germany, a business survey showed on Friday.

Manufacturers helped lift the 17-nation bloc out of the last recession, but purchasing managers' surveys showed activity in France, the euro zone's second-biggest economy, has now contracted for a year.

In contrast, German manufacturing expanded for the first time since February last year, joining Ireland as the only countries surveyed in the bloc to show growth in manufacturing activity.

"The concern is that manufacturing trends are diverging strongly within the euro zone," said Chris Williamson, chief economist at data collator Markit.

"But some consolation can be gained from the fact that January's reading was the highest for 11 months, suggesting that the manufacturing downturn has eased so far this year compared to the pace of decline seen throughout much of last year."

(Additional reporting Reuters)

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