Worry over jobs as business activity slumps in Ireland and the eurozone
Published 04/10/2011 | 05:00
IRELAND, along with the rest of the euro area, saw business activity slump in September.
New figures published yesterday showed businesses in Ireland suffered the first fall in export orders for 11 months in September.
According to the NCB Purchasing Managers' Index (PMI), a fall in new orders is the biggest factor behind the overall slowdown in manufacturing activity.
It means worrying news on the employment front, with a number of managers expecting to cut jobs this year.
Twice as many managers cut back on staff numbers last month as hired new employees. It's the fourth time employment has fallen in the last five months -- and the sharpest rate of jobs losses for a year.
The figures are the clearest evidence that the European debt crisis is damaging investment in the "real economy".
"Governments are pulling money out of economies, there is real nervousness about the wider economy and ongoing volatility. Managers are just not going to invest while that's going on," said Brian Devine of NCB Stockbrokers.
Ireland is not alone in showing signs of a slowdown. New business orders fell in every euro area country in September, according to extensive surveys of business leaders.
The PMI index of business activity hit a 25-month low for the euro area as a whole in September. The survey showed a fall in economic activity everywhere in the eurozone except Germany -- where output was unchanged.
Mr Devine predicted the trend would continue over the coming months -- until businesses have a sense that the crisis is being contained. It's bad news for hopes of an export-led recovery.
Unlike last year this time Ireland is following a similar trend to the rest of the eurozone. September was the second month in a row to see economic activity down in the eurozone.
Ireland could escape the worst of a slowdown after better news in two key Irish markets -- the US and in the UK.
Figures there showed modest growth in output last month.