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Manufacturing production falls by 3.6pc in February on weak demand

MANUFACTURING production declined by 3.6pc in February compared to January, according to new figures from the Central Statistics Office. On an annual basis, production fell 3.3pc from February 2011 to the same month this year.

The seasonally adjusted volume of industrial production from December to February was 3.9pc lower than in the preceding three-month period.

The so-called modern sector, which comprises a number of hi-tech and chemical sectors, showed a monthly decrease in production of 5.8pc in February.

During the same month there was a 0.4pc increase in the traditional manufacturing sector.

The seasonally adjusted industrial turnover index for manufacturing industries was 6.2pc lower in February compared to January. On an annual basis turnover was 5.7pc lower when compared with February 2011.

Davy Research chief economist Conall Mac Coille said it was difficult to infer much from the month-on-month changes as production data are extremely volatile and prone to revision.

However, he said the broad picture was of a slowdown in industrial production growth which reflects weakening demand in the eurozone.

The manufacturing figures came as new data showed construction activity continued to contract last month. The latest Ulster Bank Construction PMI increased marginally to 46.7 in March, from 45.8 a month earlier.

A figure over 50 means construction is growing, under 50 means it is contracting.

Contraction

The March figure was the highest this year, and was jumped on by some as a sign that the sector was beginning to stabilise.

Ulster Bank's chief economist Simon Barry said the decline continued to be broad based with no single sub-sector bucking the trend to a significant degree.

"Each of the main sub-sectors continue to witness ongoing contraction, with civil engineering again recording the sharpest falls while housing also showed large-scale declines.

"Commercial activity is holding up in a relative sense, but indications of stabilisation in this area around the turn of the year have given way to renewed weakness as the index of activity fell to its lowest level since October 2011.

"However, the new orders index rose in March, and has returned very close to the breakeven mark of 50 -- a level at which it has been bobbing around for most of the past six months, hinting that the multi-year slump may finally be giving way to a less negative pattern," he added.

The main index has shown contraction every month since June 2007.

Irish Independent