Manufacturing data at all-time low

A SLIGHT improvement in the manufacturing sector was recorded last month, though it is still significantly weaker than a year earlier.

The latest NCB purchasing managers index (PMI) rose to 45.2 in May from 44.7 in April — its lowest ever level. In May last year the survey recorded a reading of 51.9.

The PMI — an economic indicator designed to provide a measure of the health of the manufacturing sector — also reported a sharp fall in new work, which was linked to weaknesses in the construction sector.

Chief economist at NCB stockbrokers Eunan King said: “Conditions in manufacturing remained challenging in May.

“New export orders contracted for the third successive month, most likely connected to the euro’s strength against sterling. Input prices are continuing to increase, albeit at a slower rate than in April.”

Manufacturers faced a substantial rise in costs over May, according to the survey which pointed to higher prices for oil and metals.

The rate of cost inflation eased from April’s 23 month high, but was above the average for the past year.

Prices charged by manufacturers continued to rise as firms sought to pass on higher costs to customers.

However, the rate of increase was in line with January’s 26 month low as some firms reported that discounts had been offered to attract new business.

Employment in the Irish manufacturing sector fell at a notable rate in May.

Staffing levels have now fallen in each month since December last year and the latest contraction was widely linked by firms to reduced workloads.

The marked reduction in output was largely attributed by firms to lower new order volumes.