Manufacturing output boosted by fresh export orders
New business was boosted by a rise in export orders but, according to the latest NCB Purchasing Managers’ Index (PMI), spare capacity remained evident as backlogs of work and employment continued to fall.
The PMI — which measures the health of the manufacturing industry — rose slightly to 51.2 in November, from 50.9 in the previous month.
Production growth extended into a ninth successive month in November and, while the rate of expansion was fractionally quicker than in October, it was still weak. Higher new business was the main driver of rising output.
New orders were boosted by export business, which expanded as global demand strengthened and Irish manufacturers introduced new products. New export orders have now risen in 12 of the past 13 months.
Companies in the Irish manufacturing sector continued to cut jobs during November, but only at a slight rate. Apart from a modest rise in May this year, staffing levels have fallen every month since December 2007.
NCB economist Brian Devine said that fiscal and banking issues continue to be the focus in Ireland, but the underlying economy, especially those areas directly involved in exporting, are still alive.
Input cost inflation accelerated for the third successive month as a range of raw materials increased in price. The latest rise in input prices was the fastest since May. Some firms raised output prices in response, according to the PMI, though competitive pressures prevented a number of panellists from increasing charges, resulting in only fractional inflation, overall.
Also, suppliers’ delivery times lengthened sharply and at the steepest pace in three months, reflecting insufficient stocks of raw materials at suppliers.
Irish manufacturers increased input buying in November, in line with rising production as well as to avoid potential cost increases. However, growth eased over the month and was only marginal.
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