Manufacturing firms see orders rise

Manufacturing firms have reported their first increase in new orders in five months, as the overall sector continues its summer recovery.

The latest edition of the monthly purchasing managers’ index, from Investec Ireland, shows a reading of 51 points for July, the second consecutive month where progress has been reported in the sector. Anything above the neutral 50-point mark signifies growth, and July’s reading follows on from the 50.3 posting in June (itself up from 49.7 points in May).

“The latest report shows that activity in the Irish manufacturing sector expanded at a relatively quicker pace in July, aided by a spell of unusually hot weather and stronger demand from the UK,” noted Investec Ireland’s chief economist, Philip O’Sullivan.

“Manufacturers also received some slight respite on the pricing front, with input prices declining — albeit, very marginally — for the second month in a row, and output prices increasing for the second time in three months,” he added.

Mr O’Sullivan said the sector appears to be gaining momentum, but Investec remains “cautiously optimistic” that the trend will continue, noting the key will be whether increased demand from British customers can be sustained and replicated by Ireland’s other trading partners.

“July’s PMI report showed an improvement in each of the key headings, relative to June. The increased demand from the UK comes amid improving economic data there and, in that regard, is not surprising,” he said.

The increase in new orders during July was across all three market groups — investment goods, intermediate goods and consumer goods — and was the strongest monthly rise since last October.

New export orders recorded their first month of growth since February, according to the data.