Manufacturing sector showing green shoots
MANUFACTURING here expanded at its fastest pace in nine months in August with new orders and output increasing.
In a further sign of tentative recovery, businesses reported increased demand at home and abroad, according to the latest Purchasing Managers' Index (PMI) from specialist bank Investec.
Output increased for the third month in a row, while new orders grew at their fastest pace in 13 months. The headline Irish PMI came in at 52 in August – up from 51 in July and the third successive monthly rise in activity. It was the fastest rate of expansion since November 2012 and the third highest reading in the eurozone. Anything above 50 indicates expansion, below that signals contraction.
It comes amid positive news globally, with national PMI's improving in all Eurozone countries except France, and Chinese manufacturers signalling the first expansion in output in three months.
Investec economist Philip O'Sullivan said the PMI report shows a welcome pick-up in activity. "Last month we said that activity in the Irish manufacturing sector appears to be building momentum in the summer months," Mr O'Sullivan said. "This confirms that trend and puts Q3 in the frame to be the strongest quarter in the year to date for Ireland's manufacturing sector, after lacklustre outturns in Q1 and Q2."
Employment continued to rise, extending the current sequence of job creation to three months.
After rising in July, output prices were little changed in August.
Elsewhere, the Eurozone PMI compiled by Markit came in at 51.4 – rising for its fourth successive month to reach its highest level since June 2011.
National PMIs improved in all nations except France, with France and Greece the only two countries to register readings below the 50 mark.
The UK hit a two-and-a-half year high of 57.2 in August, up from 54.8 in July.
The country's PMI has signalled expansion for five successive months.
Growth rates for production, new orders and new export business all accelerated to the fastest since May 2011.
Markit's chief economist Chris Williamson said the eurozone's manufacturing continued to show signs of recovery.
"Although gains are still only modest, companies reported the strongest improvement in business conditions for just over two years, with a pick-up in new orders growth suggesting the upturn will be sustained into September," Mr Williamson said.
Meanwhile, separate figures show that 920 businesses in Ireland went bust in the first eight months of the year, marking a 21pc year-on-year drop.