Manufacturing expands again – but at slower pace
MANUFACTURING here expa-nded again last month, but at its slowest pace in four months as domestic demand fell away.
The NCB Purchasing Managers Index came in at 51.4 in December, down slightly from the 52.4 it posted in November. Despite the fall, it was still the tenth month in a row that manufacturing expanded.
The PMI measures the health of the sector in a single figure. Anything over 50 indicates expansion, under 50 indicates contraction.
The one-point drop was due mainly to weaker new orders, on the back of slowing demand and higher energy costs.
"As a result of the strength in exports, total new business grew again in December, albeit at the slowest rate since February," NCB's chief economist Philip O'Sullivan said.
"The underlying trends remain positive," he added.
Higher fuel and energy costs continue to be a headwind for the sector, pushing input prices higher for the fifth consecutive month.
Output prices remain restricted by competitive pressures but increased in December and look to be getting a little firmer," Mr O'Sullivan claimed.
New orders fell to their lowest level since February, but new orders for export hit their highest point since August, with demand coming especially from the United States.
Elsewhere, manufacturing was unexpectedly strong in most countries. In the UK, manufacturing growth hit its fastest pace since September 2011, implying the UK had come out of recession by the end of the year. The PMI hit a 15-month high of 51.4 in December.
The US equivalent index climbed to 50.7 from 49.5 during December – despite the concerns about the so-called "fiscal cliff".
Germany, however, experienced more grim manufacturing data. There the index slumped to 46 from 46.8, indicating the industry was now undergoing a severe contraction.
"The German manufacturing sector is finding it increasingly difficult to maintain output volumes close to those seen during the peak of the recovery period," said Tom Moore, senior economist at Markit who helped compile the report.