Wednesday 25 April 2018

Industrial sector enjoys a strong end to 2014

Manufacturers across the Euro-area cut prices for the fourth month running
Manufacturers across the Euro-area cut prices for the fourth month running
Colm Kelpie

Colm Kelpie

Ireland's manufacturing sector ended the year on a strong footing, with the increase in new export sales the best since 2010.

Staffing levels also rose to their greatest degree in 15 years, according to the latest Purchasing Managers' Index (PMI) for the sector.

By contrast, the Eurozone manufacturing sector ended the year in less inspiring fashion, with new orders and employment all recording sluggish growth.

Manufacturers across the Euro-area cut prices for the fourth month running, and, worryingly, activity was weak in Germany, Europe's largest economy, while the downturn in France also deepened.

UK manufacturing growth eased as the year ended, with rates of expansion in production and new orders falling back to their slowest for more than a year and a half.

But in Ireland, the PMI for December recorded gains in both output and new orders, with production growth the fastest since August.

Philip O'Sullivan, economist with specialist bank Investec, said the strong finish to 2014 is particularly welcome given the volatility surrounding Russia, Greece, Ukraine and parts of the Middle East.

"We expect 2015 to be another year of progress for the manufacturing sector here, but with the international backdrop looking like it will get worse before it gets better, conditions may not prove to be as favourable as they were in 2014," Mr O'Sullivan said.

The headline PMI here posted 56.9 in December, up from 56.2 in November. The index has been above the no change mark of 50 now for 19 months in succession.

Production growth last month was the best since August, while the rate of increase in new orders was the strongest for three months.

The manufacturing PMI for the Eurozone stood at 50.6 in December, down from an earlier flash reading of 50.8 but beating November's 17-month low.

"Eurozone factory activity more or less stagnated again in December, rounding off a year which saw an initial, promising-looking upturn fade away and stall in the second half of the year," said Chris Williamson, economist at Eurozone survey compiler Markit.

He said the weakness, coupled with muted service sector growth signalled by mid-December's flash PMI, pointed to fourth-quarter economic growth in the bloc of just 0.1pc.

The UK manufacturing sector ended the year on a softer footing, as December saw rates of expansion in production and new orders ease to the second slowest for over a year and a half. The domestic UK market remained the main source of new contracts.

Irish Independent

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