IBEC downbeat on August manufacturing data

Employers' group IBEC has today expressed its disappointment with the manufacturing figures for August of this year.

Manufacturing output fell by an annual 13.8% in August, following an increase of 8% in the previous month.

IBEC chief economist David Croughan said that in the eight months to August manufacturing output was 2% down on the same period of 2008.

"This was not a bad performance given the collapse of global markets and the intense pressures manufacturers were operating under as a result of the fall in the value of key currencies such as sterling and the dollar," he said.

"When you see the volume of Manufacturing production fall by 13.8% but the value of output falling by 23.5%, it gives you some idea of how much manufacturers are reducing prices and how great the squeeze on margins is.

He pointed out that while the output of the pharmaceutical sector had risen by 15.6% in the first eight months of the year, it was a concern that the output of the normally resilient ICT sector had fallen by over 25%.

In the traditional sectors output had fallen by 15%. New orders in the three months to July were running 10% below the same period of 2008 and in August – probably not the most reliable month because of the holiday season – orders were down 23%.

"This does not suggest that output is likely to recover any time soon," he said, "This emphasises the need to become more competitive by reducing costs and wages."