Strong demand is good news for manufacturers

THE environment facing Irish manufacturers continued to improve during December thanks to stronger demand and greater exports to Britain and Europe, according to figures published yesterday.

The monthly Purchasing Managers’ Index (PMI), which measures conditions affecting businesses, found both manufacturing output and the level of new orders picked up last month, while the overall index registered its highest level since August.

NCB Stockbrokers, which conducts the survey of purchasing managers across the manufacturing sector, said the index came in at 53.1 in December.

This was substantially higher than the 51.3 recorded in November and 51.4 in October and comfortably ahead of the 50.0 watershed that marks the difference between positive and negative territory.

NCB senior economist Eunan King said the latest figures showed conditions had bounced back after dipping in the previous two months.

“New orders accelerated, supported by strong domestic demand and export orders from the UK and eastern Europe,” he said.

The survey also showed positive signs on the jobs front and a greater ability to charge higher prices to customers.

“Employment continues to grow and, while costs continue to rise fairly sharply, output prices accelerated a little further,” said Mr King. Volumes of new business increased for the sixteenth month in a row.

There was further good news for manufacturers as the survey found the rate of increase in new business was higher than last month.

Firms surveyed said the rollout of new products had boosted demand both at home and abroad, with customers in Britain and eastern Europe bumping up their spending on Irish-produced goods.

But there was unwelcome news on the costs front.

NCB noted “a further sharp rise”, which was caused by higher raw material costs and a knock-on effect from the surge in world oil prices earlier in the year.