NCB survey shows drop in Ireland's economic activity for September
Published 06/10/2010 | 05:00
NCB's monthly Purchasing Managers Index (PMI) has shown a fall in Irish economic activity for the first time since March.
The data shows Ireland and Spain as the only eurozone economies in contraction in September.
Growth in France and Germany kept the eurozone in positive territory for the thirteenth month in a row.
This has helped boost our exports. Ireland also recorded a decline in the rate of job losses -- though employment continued to fall.
Business confidence is weaker in Ireland and in Spain, but also weaker in Germany compared with France and Italy.
Fears of a jobless recovery appear to be well founded. Despite a year of positive data, job losses in Europe continue to outstrip hiring.
According to Chris Williamson of economic research group Markit: "Although business confidence picked up to a five-month high, this was not accompanied by an increase in job creation, which remains particularly disappointing as job losses in Italy, Spain and Ireland offset improvements in France and Germany. The failure to generate jobs is likely to hinder growth of consumer spending in coming months."
The Irish index is based on a survey of 600 service sector managers, measuring a range of data, including business activity, employment and confidence. Markit collects the same data across the globe.
The overall Irish rating fell to 48.8, down from 52.9 in August. The index measures activity on a scale either side of 50. Declines are recorded from 50 down and increases from 50 up.
Worryingly, the Irish figures showed a decline in new business activity in September, as firms shied away from making purchases. Profits are also down as businesses shed margins to compete in a declining market.
Managers did see a solid rise in exports continuing from August into September thanks to better performances from our key trading partners.
Economic activity in the US is on the rise, business is surging ahead in Asia and the data showed activity better than expected in the Eurozone overall driven by solid figures from France and Germany.