Growth at fastest rate for 20 months

THE country's resurgent manufacturing sector grew at its fastest rate for 20 months last month as stronger global economic growth boosted demand for Irish goods, according to the latest NCB Purchasing Managers' Index (PMI).

The seasonally-adjusted index picked up to 53.7 in February from 52.2 in January, with the pace of expansion at its highest since June 2002.

"Manufacturing output and new orders are now at quite elevated levels and employment has begun to grow again," said Dermot O'Brien, chief economist at NCB Stockbrokers.

The PMI Index is based on a survey of 300 executives and a reading above 50 indicates expansion. It was the highest reading since June 2002 and marked the sixth straight month of expansion.

Manufacturing bosses said new orders rose for a sixth month in February, while export orders rose for the fourth month, as increased demand from the US and Asia helped to offset the impact of the stronger euro.

The report also indicated manufacturing jobs rose for the first time in three months, with the jobs component rising to 50.7. Firms had shed jobs for the previous two months, with most respondents citing the need to improve productivity as costs increased.

Input costs rose again in February, which was a consequence of strengthening global demand, which pushed up prices for raw materials.

Manufacturers responded to the higher costs by raising their prices for the fifth month running in February. The rate of inflation of output prices, however, remained well below that for input prices, as firms were restricted by strong competition.