Irish manufacturing sector growing at fastest rate in eurozone
MANUFACTURING in Ireland expanded at the fastest pace of any eurozone country last month, new data shows.
The State overtook the Netherlands in the Purchasing Managers' Index league table, in the latest piece of positive economic data that signals a very gradual recovery is under way.
October's PMI reading for Ireland was 54.9, compared with 54.4 for the Dutch. Anything above 50 indicates expansion, while below that signals contraction.
Germany, Europe's economic powerhouse, recorded a reading of 51.7. By contrast, the UK recorded a much larger reading of 56, outstripping Ireland and showing that a broad-based recovery in the non-eurozone country is under way.
The overall reading for the eurozone stood at 51.3, edging higher than the 51.1 reading in September, according to the PMI index from international finance information firm Markit.
France and Greece were the only two countries in the eurozone to see manufacturing decline, with the rates of contraction the sharpest in four and three months respectively.
Growth hit a near two-and-a-half year peak in Austria and ticked higher in Ireland, Germany and Spain.
Eurozone manufacturing production and new orders both rose for the fourth consecutive month in October.
Markit chief economist Chris Williamson said the eurozone's manufacturing economy was undergoing its strongest growth period for two-and-a-half years. But he warned that the recovery remained "frustratingly slow".
"While it is in some respects disappointing that the PMI has failed to show a steeper pick-up over the last two months, the recent growth revealed by the survey indicates a marked turnaround in the health of the manufacturing economy," Mr Williamson said.
"While the survey was signalling a 2pc-3pc annual rate of decline in industrial production earlier in the year, a 2pc-3pc rate of expansion is now being indicated."
It's not the first piece of positive economic news recently. The services sector here has also been enjoying recovery, expanding for the 14th month in a row in September.
Consumer sentiment hit a six-year high last week, with households less fearful about the outlook for the economy.
But it's not all rosy. The bulk of the sentiment survey by KBC Bank Ireland and the Economic and Social Research Institute was carried out before the Budget and we may find the mood of consumers has been dented by its impact.
And while the manufacturing and services sectors are on the road to recovery, many businesses are not yet feeling the effects.
The Government continues to tell us that employment is rising, but the unemployment rate remains one percentage point above the eurozone average, at 13.2pc.
And the amount of debt the State is saddled with, while expected to peak this year, remains staggeringly high at 124pc of the value of the economy.
The mortgage crisis remains, with little signs of it abating. At the end of June there were almost 98,000 private residential mortgages in arrears of 90 days or more.
Some 238,000 people have cancelled their private health insurance cover since the early days of the crisis, thereby heaping more pressure on the public system. Water charges are on the way and 2014 marks the first full year of the property tax.
Broadly speaking, the recovery is under way – but major issues remain.