Manufacturing growth hits 18-year high amid exports rise
Irish manufacturing growth in November hit its highest level in 18 years.
The growth was driven by stronger client demand from both the domestic market and overseas customers, according to the latest Purchasing Managers Index (PMI) for the sector.
The latest rise in new orders was one of the strongest in the survey's history, while growth in new export orders firmed to the sharpest in almost three years. The headline PMI reading was 58.1, up from October's 54.4, and its highest level since December 1999, as Irish manufacturers continue to defy Brexit concerns about a possible downturn. Any reading above 50 shows growth.
"Business confidence [has] remained elevated, with expectations of new order growth and improving economic conditions in export markets supporting optimism that output will increase over the coming year," Philip O'Sullivan, economist with Investec, said.
Manufacturers responded to the higher output demands by increasing their staffing levels in November. But the increase in staffing levels was still not enough to prevent a rise in the backlogs of work, with November's increase in the backlog the fastest in the current seven month sequence of growth.
Looking at margins, the rate of input cost inflation sharpened to a seven-month high, with this latest rise attributed to increased raw material costs, including for aluminium, paper and plastics.
Manufacturing firms were able to cover at least a portion of these cost pressures by upping output prices, as they have for 18 successive months now.
Meanwhile, helped by higher volumes, the profitability index improved to the sharpest level since the three months to April 2015. "Irish manufacturing businesses remain very upbeat about the prospects for the sector. "The International Monetary Fund's latest projections show global economic growth accelerating to a seven-year high of 3.7pc in 2018, so given the extent to which the Irish economy is leveraged to international developments we believe that manufacturers here are right to feel confident about the future," Mr O'Sullivan said.
Data from the UK and elsewhere in Europe also showed strong growth.