IRELAND’S manufacturing sector contracted at the slowest pace in June since September, with fragile domestic demand somewhat offset by the slower decline of new export business, a survey showed yesterday.
The NCB Purchasing Managers’ Index (PMI), which measures Irish manufacturing activity, rose for the fourth consecutive month to 42.5 in June from 39.4 in May but remained well below the 50.0 mark separating growth from contraction.
“Even when the PMI does breach the 50 mark it is highly unlikely to be matched by a rise in employment in the sector,” said, NCB Stockbrokers economist Brian Devine.
The latest round of redundancies signalled by respondents was the smallest since last November, but employment continued to decrease at a “severe” pace, said Markit, which compiles the data.
Data on Tuesday showed the slide in Ireland’s GDP eased in the first quarter as a resilient export sector helped partly offset plunging consumption.
But with GDP still falling 8.5% in the first quarter from a year ago, the start of economic recovery was still seen about two years away.
The PMI’s output component rose to 44.7 in June from 40.4 in May, indicating continued contraction but still the best performance for 10 months.
“Fragile demand, particularly from domestic sources, continued to negatively impact on new orders,” Markit said.
New export orders still fell “solidly” in June, though less sharply than overall new business and slower than in any of the preceding nine months, it said.
“Anecdotal evidence suggested that global demand remained weak, with some reports that the relative strength of the euro against sterling made it harder to secure business from the UK,” Markit said.