Manufacturing sector sees 13.4% gain

IRELAND’s manufacturing sectors had another strong month in October, with production levels rising by 13.4% on a year-on-year basis and by 7.3% when measured against the preceding month.

The high-tech and chemical-driven “modern” sector saw a monthly increase of 9.2% while the “traditional” sector experienced a 0.9% rise.

The manufacturing sector has held up “remarkably well” in the face of the economic downturn, according to Bloxham Stockbrokers chief executive Alan McQuaid, who added that “manufacturing production should be higher on average this year than in 2010, the second annual increase in a row”.

However, he warned that the overall average growth rate for this year will be less than half that seen in 2010. He said that with domestic demand so weak, it remains “vital” for the economy that manufacturing remain strong.

A good omen can be found in a recent survey carried out by the influential Munich-based economic research unit, the IFO Institute, which showed that Ireland was the only eurozone economy expected to improve in the fourth quarter of this year, a finding based on a survey of nearly 300 economists and business leaders.

“We continue to believe that when the world economy regains momentum, Ireland is better placed than most to take advantage of that, and we still think a strong manufacturing production/export performance will provide the platform for a sustainable Irish economic recovery over the next few years,” McQuaid added.

“Ireland has a number of high-value sectors which are relatively immune to the normal business cycle trends, and these are helping to underpin our continued healthy export performance.

“In particular, output from the pharmachemical and food sectors performed strongly in October.”

“Improved competitiveness has also meant that Irish firms are growing market share,” said INEC chief economist Fergal O’Brien said. “However, the latest figures show that not all sectors are immune from the eurozone slowdown. The drop in output in the engineering and plastics sectors is a concern.”