Manufacturing sector index returns to a positive outlook

IRELAND’s manufacturing sector returned to positivity last month with business activity levels picking up after a disappointing September according to latest data.

The latest purchasing managers’ index (PMI) from NCB Stockbrokers amounted to 50.9, marginally above the breakeven level for positive movement in business activity, but impressively up on the disappointing 48.4 measured in September.

The bounce came about mainly due to a higher level of new business orders from export markets.

“New business from abroad grew at a faster pace than overall new orders, with panellists reporting increased orders from the UK in particular.

“The latest rise in new export business was the fastest since June,” the index noted.

“Importantly, the new orders index rebounded strongly from 47.3 in September to 51.1. The export sector has been the driving force of the Irish economy during the current crisis. It is, thus, significant to note that new export orders surged from 45.9 to 54.9 in October.

“The export sector must continue to perform robustly to counterbalance the continued weakness in the domestic economy and will enable the economy to better absorb the forthcoming fiscal cuts,” commented NCB’s chief economist, Brian Devine.

On the jobs front, the news was predictably downbeat, but more mixed than usual. Even though staffing levels, at Irish-based manufacturing firms, continued their decline during October, the actual rate job cutting eased.

Meanwhile, output prices decreased for the second consecutive month, in October – respondents reporting that intense competition and pressure from clients had been the main factor behind discounting.