Growth in manufacturing increases for seventh month in row
The NCB Purchasing Managers’ Index, which measures manufacturing activity in the economy, rose to 56.0 in April from 55.7 in March.
It was the seventh month in a row to record an increase, while the survey showed that employment rose at a solid pace that was just short of the 11-year-high seen in March 2011.
Any reading above 50 represents growth in the sector over the period, while a reading under 50 marks a decline.
Irish exports rose to a three-year high in February and growth this year and next will rely heavily on the performance of the export sector, analysts said.
However, there are growing fears that the continuing strong performance by exports will slow as the euro strengthens, but yesterday’s figures showed new export orders in the manufacturing industry remained strong, falling only moderately from 59.2 in March to 59 for last month.
“The manufacturing sector is largely driven by exports and the euro’s continued rise against sterling and dollar will be of concern, but to date demand is outweighing this impact,” Brian Devine, an economist at NCB Stockbrokers, said.
Inflationary pressures are becoming an issue for Irish manufacturers according to the latest data, as companies cited rising cost pressures as a concern.
Input prices rose substantially again during April, extending the current period of inflation to 16 months.
Respondents indicated that oil-related costs were the key source of inflation, with higher raw material prices also mentioned.
Close to 45% of panellists signalled a rise in input costs over the month, against just 2% that posted a fall.
In response, companies increased their output prices for the fourth month in a row.
New business rose for the seventh month in a year and at a sharp pace as demand improved, NCB noted.
New export orders rose considerably, with companies saying that Britain had been a key source of growth.
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