Positive start for manufacturing with increase in new orders
THE new year has opened with more positive signs from the Irish manufacturing sector, as new orders in December increased for the sixth month in a row.
Eurozone manufacturing also recorded its strongest growth in more than two-and-a-half years, while the rates of expansion in the UK bear out the recovery taking hold there.
The latest Purchasing Managers' Index (PMI) examining the sector in Ireland showed the rate of business expansion here was quicker last month than in November.
PMIs are important because they are regarded as reliable forward-looking indicators of activity in an economy.
A further rise in employment was also recorded for the seventh month in a row.
Some businesses pointed to a rise in the number of orders for export, amid new business from the UK, US and China.
But despite this, growth of new export orders eased to their slowest in six months.
Philip O'Sullivan, economist with Investec, said the latest report showed a "solid finish" to the year.
"Within the data, we note a pick-up in the rate of growth in new orders, in spite of the pace of expansion in new export orders slowing for a third successive month," he said.
"Those respondents who reported growth from overseas attributed this to improved demand from the US, UK and China.
"Employment has been a highlight of the Manufacturing PMI report in recent months, and today's release shows that firms continued to add to headcounts into year end.
"Respondents attributed this rise in staffing levels to a need to support rising production."
The seasonally adjusted PMI rate for December was 53.5, up from 52.4 in November.
Anything above 50 indicates expansion.
Eurozone manufacturing also recorded its strongest growth in more than two-and-a-half years, according to a separate PMI survey.
Rising output and fuller order books encouraged manufacturers to hold off from job cuts.
The seasonally adjusted eurozone PMI rose for the third month, running to post 52.7 in December, up from 51.6.
The headline PMI signalled expansion throughout the second half of the year.
For the final quarter, the sector recorded its best performance in two-and-a-half years.
Despite a challenging property sector, the Netherlands topped the eurozone PMI table, recording a rate of 57 to post a 32-month high, but output fell in France to a seven-month low. In the UK, December saw rates of expansion in production and new orders both remain among the highest in the 22-year survey history.
Companies benefited from strengthening domestic market conditions and a solid bounce in new export orders.
FURTHER ANALYSIS -- PAGES 34-35