Manufacturing falls at fastest pace in 4 years

Manufacturing output fell at its fastest pace for nearly four years last month, with employment levels in the manufacturing sector showing their sharpest decline since late 2011.

Weakening market demand was the main factor in the lower production levels, according to the latest edition of the monthly manufacturing purchasing managers’ index, from NCB Stockbrokers.

The index — which fell to a reading of 48 points, from 48.6 (anything below a reading of 50 points signifies a sector in decline) last month — also shows that new business orders declined for the third time in four months.

“According to respondents, deteriorating economic conditions — in Ireland and across Europe — had been behind the fall. New export orders also declined, despite some reports of growth in sales across Asian markets,” the latest index said.

Overall output from Irish-based manufacturers declined for the second consecutive month, in April, with the latest dip happening at the sharpest rate since Aug 2009. The fall in employment levels, among respondent companies, was also the biggest seen since Sep 2011.

“Employment had been a highlight of the Manufacturing PMI during 2012 ... However, April saw the fastest rate of decline in manufacturing employment since September 2011,” noted Philip O’Sullivan, chief economist with NCB.

“When the previous PMI reading [for March] revealed an end to an impressive 12-month sequence of growth for the manufacturing sector, we described it as a ‘disappointing release’, adding that we would be monitoring ‘to see if any of these trends have persisted into the second quarter, paying particular attention to see if the elevated macro-economic uncertainty … weighs on survey findings’. On the evidence of today’s report, the second quarter got off to an uninspiring start for the Irish manufacturing sector.”