Manufacturing PMI shows strong growth

THE manufacturing sector grew steadily last month, though at a slightly slower rate than in June.

The July NCB purchasing managers index (PMI) report on Irish manufacturing showed a solid improvement in business conditions in the manufacturing sector with output and new orders rising robustly.

The seasonally adjusted PMI registered 53.1, down from June’s nine-month high of 54.0. Any figure over 50 signals growth.

Senior economist at NCB Stockbrokers, Eunan King said: “The manufacturing sector continues to grow at steady if less robust pace than in June.

“Export orders were strong and overall orders held up at close to the fastest pace this year. Pricing power appears strong and there was a marked acceleration in input prices.”

The report said that many firms suggested that the launch of new product lines and higher exports contributed to overall new work expansion.

New export business also rose at the sharpest pace for 13 months in July.

Solid growth of new business from abroad was linked by firms to an improvement in demand from clients in Britain and the euro area.

The PMI also said higher new business levels and productivity improvements contributed to a 47th consecutive month-on-month rise in output at manufacturing firms last month.

The rate of production growth was robust, but slightly weaker than in the previous month.

Increased output led to lower backlogs of work at a number of firms, it said.

Firms also linked the contraction of backlogs to greater utilisation of finished goods stocks.