15-year high for manufacturing

Manufacturing activity rose at the fastest rate in almost 15 years last month as the sector continued to show signs of month-on-month improvement.

The Investec monthly Purchasing Managers’ Index (PMI) rose to 57.3 in August from 55.4 the previous month with new orders rising at the quickest pace since December 1999.

Commenting on the results, Investec CEO Philip O’Sullivan said improvements in both domestic and external demand drove the increase. “The latest Investec Manufacturing PMI Ireland report shows the headline PMI improving to 57.3 in August, signifying the fastest rate of expansion in activity since December 1999, as output and new orders both rose.

New product lines and improving demand for both export and domestic markets helped the new orders component rise to its highest level in almost 15 years.

In terms of overseas demand, panellists cited the UK and Asian markets as sources of new work during the month,” he said.

Another highlight of the survey was the employment index which shows that the number of people employed in the sector rose again last month — the 15th in succession.

The rate of job creation also quickened to the fastest pace in three months as firms responded to rising demand.

Both input and output prices declined marginally in the period with reductions in pulp, paper, and dairy prices all contributing to lower input prices.

“The news was more mixed on the pricing side, with a marginal decline — the first in three months — recorded in output prices while input prices also fell for the first time in 13 months. Firms stepped up their purchasing activity during August, with the quantity of purchases rising at its sharpest pace since February 2011, but this was not enough to prevent a second successive decline in stocks of purchases as end- demand outweighed input buying,” Mr O’Sullivan said.

The figures reflect the strong performance of the sector, particularly in the context of weakening signs from some eurozone trading partners, he added.