Manufacturing growth expected in 2014

The manufacturing sector is expected to show modest growth this year, with January already having shown a return to monthly production increases.

Latest preliminary industrial production data, published yesterday by the CSO, showed a 0.4% month-by-month increase in output in January; following on from a 2.4% decline in December.

On a year-on-year basis, however, production was down by 1.4%; but this was a marked slowdown on the near 8% annualised drop seen in December.

The so-called ‘modern’ sector — which incorporates technology firms, but is mainly driven by multinational pharmaceutical companies — showed a monthly production increase of 1.6% for January, according to the CSO.

The domestic economy-related ‘traditional’ sector saw output rise by 3%. Year-on-year, the ‘modern’ sector was down by over 5%, while the ‘traditional’ sector is up by nearly 8% on the year.

While the so-called patent cliff — the impact of certain drug products, manufactured here, coming off patent — is likely to remain a drag on manufacturing growth to some degree, commentators are remaining relatively upbeat about prospects.

“Demand from the eurozone and the UK for Irish goods should start to pick up now as these economies recover. As well as that, the Irish manufacturing PMI has been in expansionary territory for the nine months up to February,” noted Alan McQuaid, chief economist with Merrion Stockbrokers.

His counterpart in Davy Stockbrokers, Conall MacCoille, said & in terms of an outlook for 2014, that he remains optimistic that — “all things being equal” — manufacturing output will post “a modest single-digit increase” on 2013.