Manufacturing growth boosts jobs

GROWTH in Irish manufacturing pushed job creation in the sector to its highest in almost 11 years as surging exports remains the one bright light on the economic front.

The NCB Republic of Ireland Manufacturing PMI for March shows the sector continued its strong start to the year in March as output and new orders rose sharply.

The employment element of the Index indicates that job creation in the manufacturing sector remains strong and was at its strongest this year in March.

“Firms took on extra staff in March, in response to higher new orders. Employment has now increased in each of the past four months. Moreover, the rate of job creation in March was marked, and the strongest in nearly eleven years. Approximately 15% of panellists raised staffing levels during the month,” the reports authors state.

The seasonally adjusted NCB PMI indicates that Irish manufacturing rose for the 13th month running in March, and at a substantial pace. Around one-third of respondents recorded increased production as new orders expanded.

NCB Stockbrokers economist Brian Devine said the NCB PMI indicated that the sector continued to expand, although the pace of expansion moderated with the reading at 55.7 from 56.7 in February. Output (57.8 from 60.9), new orders (57.9 from 59.2) and employment (54.7 from 53.4) all continued to increase.

“The manufacturing sector is largely driven by exports. Exports had a stellar year in 2010, increasing by 9.4% and we expect them to grow by a further 6.0% in 2011. Despite this GNP still fell by 2.1% and we expect another decline of 1.4% in 2011. It seems like an insignificant fact in light of the banking sector issues, but if it weren’t for the exporting sector the economy would be in far worse shape,” he added.

The index indicates that firms were able to secure a greater amount of new business again in March, with the rate of growth steeper than the long-run series average.

“New export orders increased at a slightly faster pace than overall new business, with improved demand from the European market mentioned by firms,” the report said.

Like elsewhere in Europe companies in Ireland are facing rising cost pressures. The sub-index measuring input prices jumped to 80.9 in March from 71.9 in February. “Rising oil prices were reportedly a key source of inflation. Manufacturers in Ireland were able to partly pass on higher raw material costs to their clients. Charges rose sharply, and at the fastest pace in the series history,” the report said.