Manufacturing up 4% in November

Manufacturing production continued to surge to stronger levels in November with a 4% increase on the previous month representing an annual gain of 33%.

The data released by the CSO yesterday shows the continued expansion of the sector which has been evident over the past number of months with an annual increase of more than 20% now recorded for the fifth straight month.

Growth was predominantly driven by large multinationals with the so-called “modern” sector posting a monthly jump of 9.3% in November and was up more than 55% for the year.

Commenting on the strong figures, Merrion Stockbokers economist Alan McQuaid said this trend of multinational-led growth is likely to continue into 2015.

“Despite the pick-up in output on the indigenous side in recent months, manufacturing growth will for the forseeable future be primarily driven by industries under the “modern” or multinational umbrella, but based on the figures for 2014 the prospects look very good for 2015. “We expect the global economy to pick up speed in the coming year helped by lower energy prices and demand for Irish goods in general should increase as a result, with currency developments, particularly in relation to the euro/ dollar a huge plus,” Mr McQuaid said.

The country’s particularly strong chemical and pharmaceutical sector recorded another huge annual increase of more than 75% in November — something Mr McQuaid suggests probably reflects positive base effects as a result of the expiry of patents in 2013. Indigenous manufacturing companies’ output slumped 4.4% in November but was up more than 17.5% when compared with the same month last year.

November’s yearly rise marked the eighth such rise in a row. Positive developments in the UK economy — the sector’s main trading partner — and a recovery in sterling helping the indigenous companies.

Consumer goods companies recorded a 50% annual increase with energy producers’ output climbing 70% on last November’s figures. The most important challenge for the economy, and manufacturing sector in particular, is to keep a lid on price increases that have the potential to jeopardise future growth, Mr McQuaid added.

“Ireland is better placed than most to take advantage of an upturn in the world economy.

“However, it is crucial that the economy remains competitive, something which IDA Ireland pointed out again this week, saying any loss of competitiveness would have a negative impact on the levels of foreign direct investment here.”