Production surges at fastest rate in 11 years
MANUFACTURING companies here and abroad enjoyed their best month in years in January as the world economy powers ahead, stoking demand for exports.
In Ireland, manufacturing activity grew at the fastest rate in nearly 11 years in January, according to the NCB Purchasing Managers' Index. New export business expanded at the third-fastest pace in the series' 13-year history.
The index rose to 55.8 from 52.2 in December, staying above the 50 mark, which separates growth from contraction, for the fourth month in a row and hitting its highest level since April 2000.
NCB Stockbrokers economist Brian Devine said the figures highlighted the "large dichotomy between the exporting sector and the domestic part of the economy, which has been evident since the recession started".
While this jump is good for growth, it is unlikely to create many jobs. The Central Bank warned earlier this week that growth in the real economy would stall again this year while unemployment would continue to rise because the export sector was not labour intensive and did not create many jobs.
Backing up the figures, fewer manufacturing companies are going out of business, according to a separate report from InsolvencyJournal.ie, which concluded that manufacturing and other kinds of insolvencies were down 13pc last month compared with the same month last year.
There was more cheer from Ireland's three largest export markets with the UK and US both reporting a surge in manufacturing last month, while Germany saw unemployment fall to its lowest level since March 1992.
The signs of buoyant growth from most corners of the globe surprised many economists and sent shares higher.
In Britain, our biggest export market, manufacturing grew at a record pace in January as domestic and export demand boosted orders.
Manufacturing "continues to expand quicker than even the most optimistic amongst us could have predicted", David Noble, chief executive officer at CIPS, said. That may prompt the Bank of England to push up interest rates, he warned.
In the US, manufacturing accelerated at the fastest pace since May 2004; while German unemployment fell to an 18-year low, stoking concerns that the country is running short of skilled labour after the fastest economic expansion since reunification in 1990.