Sunday 22 July 2018

Surge in new manufacturing orders

Stock image: PA
Stock image: PA
Colm Kelpie

Colm Kelpie

New manufacturing orders here are rising at their fastest level in more than two years.

Export orders were secured from a number of international markets, but sterling weakness hurt demand from the UK, according to the latest Purchasing Managers Index (PMI) for the sector.

But there were slower increases in output and employment, while business costs continued to increase, which dragged down the overall rate of growth in the sector.

The rate of cost inflation quickened to a three-month high in September. Higher prices for raw materials, including wood and metals, were reported.

Philip O'Sullivan, economist with specialist bank Investec, which published the data, said the outlook for the sector remained positive.

"The forward-looking Future Output index improved to the highest in four months in September, with seven times as many respondents predicting a rise in output over the next 12 months against those who are pessimistic. Given the strengthening economic backdrop both at home and abroad, we concur with those who are positive on the outlook."

The seasonally-adjusted PMI posted 55.4 in September, down from 56.1 in August. Manufacturing production rose for the 14th successive month in September. The scale of the pace in new orders was the chief positive from the data. They rose at a sharp and accelerated pace, with the latest expansion the strongest in 26 months.

New export orders also increased, albeit at a weaker pace. New business from abroad was secured from a number of international markets, although the strength of the euro against sterling reportedly limited demand from UK customers.

Irish Independent

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