Poll points to economic improvement

FURTHER indications of a turnaround in the economy are detailed in the latest poll of purchasing managers.

It shows business conditions at the end of October, 2003, show their sharpest increase in 15 months.

Business conditions in the Irish manufacturing sector improved for the second consecutive month, according to the seasonally adjusted Purchasing Managers Index (PMI).

It shows that, between September and October, the PMI Index rose from 50.4 to 52.4, quite a sharp rise by comparison with earlier surveys.

The data suggests the rate of improvement was the sharpest since July, 2002. Anything above 50 implies growth in the Irish manufacturing base while a lesser figure suggests contraction.

Commenting on the survey, Dermot O'Brien, chief economist, NCB Stockbrokers said: "The latest manufacturing PMI provides clear evidence that recovery in the sector is becoming more solid, with the overall index and its key output and orders components at their best levels since July, 2002."

It was also significant, said Mr O'Brien, that the survey showed for the first time in 14 months that improved business confidence produced the first positive reading on manufacturing employment.

Rising levels of output and new orders drove the Index, as incoming business rose for the second successive month, following an 11-month period of decline between October, 2002, and August, 2003.

Carried out by NCB Stockbrokers the survey reported improved business confidence in the domestic market had boosted demand. However exports fell over the period explained by soft demand in Germany and the US where recovery is still tentative.

Apart from boosting output to meet current demand, manufacturers boosted output on top of that for the second month running in October. Moreover the rate of expansion of production picked up sharply, reaching its strongest level since July, 2002.