Manufacturing industry expands at slowest rate in two years
The Irish manufacturing industry expanded at its slowest pace in two years in February while employment levels in the sector continued to rise.
According to the Ivestec Purchasing Managers' Index (PMI) the industry continued to grow for the 33rd consecutive month.
The headline reading from the PMI for the month of February was 52.9, down from the January figure of 54.3.
The PMI report for February indicates the global downturn had a major effect on the manufacturing sector in Ireland.
Chief economist at Investec, Phillip O'Sullivan, said that factors outside of Ireland had taken a toll on the industry's growth here.
"The latest Investec Manufacturing PMI Ireland report suggests that the global headwinds may be starting to weigh on the manufacturing sector here. The headline PMI fell to 52.9 in February from the previous month’s 54.3 reading. While this still signals that the sector is in growth mode, the implied pace at which it is expanding is the slowest for two years," Mr O'Sullivan said.
The rate of expansion in new orders has slowed to its weakest level since November 2013 with growth in new export orders at its slowest since February 2014.
Input prices fell in February at the sharpest pace since late 2009, with panellists pointing to decreases in the cost of commodities such as oil, food and polymers as the main causes for the decreases in input prices.
"When the Investec PMIs for January were released a month ago we cautioned that “Ireland will not be immune to any slowdown in international trade”. We suspect, therefore, that some of the index changes noted above are connected to the more troubled global backdrop. With that being said, on balance we expect that the sector will record another year of growth in 2016," Mr O'Sullivan continued.