Manufacturing sector activity grows further

Manufacturing sector activity here grew for the eighth month in a row in October and at the fastest rate in three months as orders from abroad rebounded following a September dip, a survey has revealed.

The country’s export-reliant economy grew last year for the first time since the financial crisis began and is expected to post very modest growth again this year, a forecast that appears to be backed up by recent manufacturing and service sector data.

Manufacturing activity has grown every month since February and although it has not matched the pace of early last year when growth was at its fastest, the NCB Purchasing Managers’ Index (PMI) climbed to 52.1 in October from 51.8 in September.

“On closer examination of the data we note that new orders are in positive territory for a ninth month running, with survey respondents citing support from new product launches and stronger demand from export markets during October,” said Philip O’Sullivan, chief economist at NCB Stockbrokers.

“One headwind is input prices which have been increasing on the back of higher energy and raw material costs although firms had some success in passing on a portion of these increased input costs through higher output prices.”

The economy has proved resilient in the face of worsening PMI data across the eurozone and flash figures last week showed that businesses suffered their worst month since the bloc emerged from its last recession, with the manufacturing activity index falling to 45.3.

The Government has said the weaker global outlook will hurt growth in its export industry next year but after the sub-index measuring business from abroad slipped to 48.4 in September from 53.4 previously, it grew again in October, rising to 51.8.