Manufacturing growth increases in February

Growth in the country’s manufacturing activity recovered from a nine-month low in February, extending the expansion in the sector to 12 months even as most of the eurozone continues to contract, a survey showed yesterday.

The economy returned to growth in 2011, while the slump seen elsewhere in the eurozone likely saw the export-led expansion slow to just 0.9% last year.

In February, the NCB Manufacturing Purchasing Managers’ Index rose to 51.5 from 50.3 in January, back to the level of growth seen at the end of last year, and well above the 50 line that divides expansion from contraction.

According to World Bank figures, manufacturing contributes around one quarter of Ireland’s gross domestic product.

The growth here stands in stark contrast to the contraction in factory activity for the eurozone as a whole, as seen in flash PMI data.

February’s rise was driven by a return to growth in new orders, which had slipped into negative territory for the first time in a year in January, while new export orders also climbed, albeit marginally, for a fifth successive month.

The positive momentum also filtered through to the number of new jobs in the sector, with the subindex measuring employment up to 52.7 from 49.6 in January, when it contacted for the first time in 11 months.

“Encouragingly, the improvement was partly attributed to expectations of higher production requirements over the coming months,” Philip O’Sullivan, chief economist at NCB Stockbrokers, said of the bump in employment.

“In all, with the headline PMI reading pointing to a 12th successive month of growth for the Irish manufacturing sector, and the rate of expansion improving from the nine-month low in January, this is a solid outturn.”

Data released this week showed the unemployment rate here fell to 14.2% in the fourth quarter of last year, a more than two-year low.

Plans for reducing the Government debt set to peak above 120% of gross domestic product this year depend on the domestic side of the economy improving from next year and GDP growth accelerating to above 2% in 2015.