Manufacturing growth remains ‘steady’

NCB Stockbrokers is forecasting continued “steady and robust” expansion in Ireland’s manufacturing economy.

The upbeat sentiment follows the company’s latest monthly purchasing managers’ index (PMI) for the manufacturing sector recording improved conditions for the 37th consecutive month, in September.

September’s index — which was published yesterday and which measures the monthly economic health of the sector — was up to 54.2, from 54.1 in August.

There was a marked increase in the volume of new orders placed with Irish manufacturing firms during September — which most firms linked with the launch of new product lines. New export orders rose for the sixth month in a row.

The production rate also showed a rise during the month, with improvements in staff productivity leading to output gains. Overall, productivity has now increased in each month since September 2003.

“Growth was around the same pace of the previous two months, which was respectable,” said Eunan King, senior economist at NCB.

“Orders growth held up, despite a deceleration in export orders, implying robust domestic demand. Input prices accelerated a little while output prices continued to rise at about the pace of most of this year. It seems a case of continued steady expansion.

“Despite higher input prices, Irish manufacturers’ quantity of purchases rose for the 13th consecutive month. Moreover, the rise in input buying was solid and sufficiently strong to lead to the first increase in stocks of purchased goods for 21 months,” according to Mr King.

There was also good news on the employment front, with Irish manufacturers registering an increase in staffing levels for the sixth month in a row in September. Most staff were hired as part of efforts to satisfy greater new order volumes.

However, the rate of job creation eased and was the lowest for five months.