Friday 19 January 2018

Manufacturing up at home and in Germany but rest of eurozone weakens again

Thomas Molloy

Thomas Molloy

Manufacturing activity expanded here and in Germany but contracted everywhere else in the 17-country eurozone, according to new reports.

The rate of growth in Ireland's manufacturing sector improved for the 12th month in a row in February as demand rose and companies won new clients.

"This is a solid out-turn,'' said Philip O'Sullivan, an economist at NCB Stockbrokers, which compiles the report here.

Similar reports from elsewhere in the eurozone and beyond painted a mixed picture.

US manufacturing activity increased in February at its fastest clip in 20 months, but Asian factories slowed and European output fell, suggesting the road back to robust global growth remains uneven.

In the United States, rising demand lifted the measure to its highest level since mid-2011, helping the sector regain some of the momentum lost in the second half of last year.

It was a different story elsewhere, as weak demand in China's domestic market slowed the pace of growth in the country's dominant manufacturing sector to multi-month lows.

"It's doubtful we'll see Europe emerge as a major global growth engine this year; therefore the burden is on the United States and Asia, China in particular," said Dean Maki, chief economist at Barclays Capital in New York.

Eurozone manufacturing was held back by dismal performances in France, Italy and Spain. Manufacturing shrank for the nineteenth month.

Britain saw manufacturing contract unexpectedly in February as new orders dwindled, making it likely the sector will drag on economic growth in the first quarter in a country at risk of sinking into a triple-dip recession. (Additional reporting Reuters)

Irish Independent

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