Wednesday 13 December 2017

Output expands slightly with new export orders

Brendan Keenan

MANUFACTURING output grew faster for a second month running in November, according to the monthly survey of managers.

The rate of growth remains modest, as measured by the NCB Purchasing Managers' Index. The gauge, designed to provide a single figure measure of the health of the manufacturing industry, rose slightly to 51.2, from 50.9 in October, where a number above 50 indicates expansion.

Total new business was boosted by a marked rise in new export orders, but spare capacity remained evident as both backlogs of work and employment continued to fall, the survey found.

Production has been growing for nine successive months, according to the survey.

"Although the rate of expansion was fractionally quicker than in October, it was still weak," said Brian Devine, chief economist at NCB.

"New export business expanded markedly as global demand strengthened and Irish manufacturers introduced new products.

"New export orders have now risen in 12 of the past 13 months," he said.

Managers reported that firms continued to cut jobs during November, but at only a slight rate.

Apart from a small rise in May, staffing levels in manufacturing have fallen in each month since December 2007.

Firms which shed jobs blamed insufficient workloads and attempts to cut costs.

Input cost inflation accelerated for the third successive month, and at the fastest rate since May, on a range of raw materials.

Some firms raised prices in response, although competitive pressures prevented a number of firms from passing on increased charges, so that overall inflation rose only slightly.

Suppliers' delivery times lengthened sharply, and at the steepest pace in three months, largely reflecting insufficient stocks of raw materials at suppliers' warehouses.

Post-production inventories also decreased over the month, mainly as a result of increased sales.

However, the rate of decline was much weaker than in the previous month, and was the slowest in two-and-a-half years.

Irish Independent

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