Monday 19 February 2018

Irish manufacturing sector grows at slowest pace in 21 months

Philip O'Sullivan is Chief Economist with Investec Ireland
Philip O'Sullivan is Chief Economist with Investec Ireland
Michael Cogley

Michael Cogley

Growth in the Irish manufacturing sector moved at the slowest pace in 21 months according to Investec’s monthly Purchasing Managers’ Index (PMI).

The PMI is an indicator designed to provide a single-figure measure on the health of the industry and for the month of November it showed that, while the figure was positive, it was lower than October’s.

More positively new orders increased for the twenty ninth successive month while new export business also continued to grow.

Speaking about the figures chief economist at Investec Philip O’Sullivan said: “While the latest Investec Manufacturing PMI Ireland report shows a further solid strengthening of business conditions in the Irish manufacturing sector in November, the pace of growth has moderated to its weakest in 21 months. The headline PMI came in at 53.3 last month, down slightly from the 53.6 recorded in October.”

It is understood that the strength of the sterling and new business wins from the UK helped to contribute to the growth of new exports orders.

"We are also pleased to see that headcounts in the sector continue to grow at a healthy clip, as they have consistently done over the past two-and-a-half years. Helped by these extra staffing resources, Backlogs of Work recorded a fourth successive monthly decline," Mr O'Sullivan said.

The PMI also showed a continued fall in input costs in November. However, the fall was at the slowest pace of the three-month sequence of decline.

On the outlook from the figures Mr O'Sullivan said that Investec was sticking with its October outlook.

"Last month we noted that “manufacturing firms here remain positive on the outlook, but perhaps not as much as they were earlier in the year when the prospects for the global economy (and, within that, emerging markets in particular) seemed stronger”. Given the more moderate growth suggested by several components of this month’s PMI, we are sticking to that narrative.”

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