Tough month for factories as domestic demand falls
FACTORIES in Ireland suffered another tough month in February as manufacturing continued to shrink amid faltering domestic demand.
The local NCB Purchasing Managers Index inched up to 48.6 last month from 48.1 in January, suggesting that the manufacturing sector is shrivelling but at a slower rate than previously.
"It is much the same story as in previous months; domestic demand and employment remain weak while new export orders continue to accelerate past the 50 mark reflecting the pick up in global activity," NCB economist Brian Devine said yesterday.
There was some good news for local manufacturers with new business from abroad growing at the fastest pace in almost four years as manufacturers won foreign business.
The report came on the same day that Kingspan, one of the country's biggest manufacturers, said sales in mainland Europe were stable while falling here.
Similar manufacturing surveys released elsewhere in Europe and the US yesterday reinforced a picture of healthy manufacturing expanding across the euro-zone and further afield.
Manufacturing in the 16-nation euro-zone accelerated to the fastest pace in more than two years in January as reviving global demand boosted export orders.
The index increased to 54.2 from 52.4 in January, the highest since August 2007. In the UK, Ireland's biggest trading partner, manufacturing grew for a fifth month in February. Like Ireland, Spain and Greece saw their economies shrink despite the gains elsewhere.
"Global demand is increasing and the euro region is benefiting as a result," said Christoph Weil, an economist at Commerzbank in Frankfurt.
"Manufacturing will continue to show positive developments over the coming months while domestic demand will remain subdued."
Elsewhere, a similar pattern emerged. Much of Asia reported a bumper February although there were signs of problems in China.
In the US, the rate of expansion was a little slower than the previous month but there was still evidence of healthy growth for a seventh consecutive month with the gauge reading at 56.5.