Services and manufacturing spike

IRELAND’S services and manufacturing industries are expanding at the fastest rates in almost a year, as fresh orders pump confidence into the sectors.

The NCB Purchasing Managers’ Index (PMI), which measures activity in the services sector, rose to 55.1 from 53.9 in January its best growth in seven months and the second straight month it was above the 50 mark. The strongest rise was registered at technology, media and telecoms companies.

The positive services industry data comes just days after a similar PMI survey showed that manufacturing grew strongly last month — with the fastest increase in new business orders in more than 11 years; the sharpest rate of job creation for nearly five years and actual production increasing at its fastest pace in 13 years.

There are some signs of life in the local economy, said Brian Devine, economist at NCB Stockbrokers, with total new business growing for the first time in six months.

“The less of a drag from domestic demand the greater the chance of a positive outcome for GNP in 2011,” he said. “The latest NCB services PMI makes good reading on this front.”

Bloxham Stockbrokers said “with total business growing for the first time in six months, there appear to be some signs of life in the local economy”.

The service providers survey also predicted an increase in activity over the next 12 months.

“Moreover, the level of sentiment continued its rebound from the recent low seen around the time of the EU/IMF bailout, and reached the highest in six months. A number of respondents indicated that client confidence had shown signs of strengthening amid improving economic conditions in Ireland.

“This is expected to lead to higher new business over the coming year. There were also predictions that new work from external markets would continue to boost activity, with the UK and emerging markets highlighted,” the report states.

The seasonally adjusted Employment Index, within the index, posted only fractionally below the 50.0 mark in February, suggesting employment levels remained broadly unchanged since January.

Where staffing levels decreased, panellists indicated that this mainly reflected the non-replacement of leavers.