Record jobs drop in manufacturing

FALLING workloads led to a record drop in jobs in the manufacturing industry last month.

The latest NCB purchasing managers index (PMI) also showed further declines in output and new orders in the sector.

At 44.9, the index, designed to measure the health of the manufacturing industry, was down from July’s record low of 43.9.

In August, manufacturers’ backlogs of work fell at a substantial rate, the second-sharpest in the six-year series history.

The PMI readings also point to further job losses in the manufacturing sector over the remainder of the year.

NCB stockbroker chief economist Eunan King said: “The slowing rate of contraction in the PMI index in August is welcome and is associated with some easing in input prices and a slowing rate of contraction in output, new orders and exports orders.

“However employment continued to contract at a sharper pace.”

Mr King added that the environment for manufacturers remains extremely challenging.

Overall new business has now declined for six months running as new work from abroad fell as a result of the strength of the euro affected demand.

The index noted that the manufacturing sector remains under pressure and is likely to remain so over the coming quarters as the domestic economy remains weak and the British economy and the eurozone begin to slow markedly.

As backlogs of work fell at a substantial rate last month, respondents said the decline in new business led to the clearance of backlogs while firms also reported that finished goods stocks had been utilised to complete outstanding orders.