Improving economic conditions and stronger export demand last month resulted in the fastest rate of growth in new manufacturing orders since 2011.
The latest Investec Manufacturing Purchasing Managers’ Index (PMI) shows a sharp increase in new business with 36% of those surveyed reporting an increase in new business.
The manufacturing industry experienced its 13th consecutive month of growth in June, with the rate increasing marginally from May.
Investec Ireland chief economist, Philip O’Sullivan, said the report “shows the sharp increase in new orders was attributed to improving economic conditions and higher demand from abroad, with the rate of growth in new export orders rising to the highest level in over three years”.
The PMI in June was 55.3, up slightly from 55.0 in May. Any value above 50 indicates growth in the manufacturing economy.
The manufacturing expansion also sustained continued employment growth in the sector which remained strong despite declining from a 15-year high in May.
“Employment growth moderated from May’s high (which was the fastest rate of growth recorded since December 1999) but remained robust.
Staffing levels have now grown for 13 successive months,” said Mr O’Sullivan.
Output prices also rose marginally for the first time in five months during May, with 90% of manufacturers seeing no change.
The slight increase was attributed to higher input costs which was linked to higher steel costs.
Despite falling to the lowest level of expansion since February, Irish manufacturing firms recorded the 13th consecutive month of production growth as a result of higher sales volumes.
Overall, the data signals an equally positive second half of the year, according to Mr O’Sullivan.
“The headline Manufacturing PMI remained greater than or equal to 55 throughout Q2 2014, signalling a period of robust growth for the sector. Given the improving economic conditions at home and abroad and manufacturers’ own confidence, as evidenced by their on-going willingness to increase staffing levels and purchase activity, the outlook for the rest of the year looks bright,” he said.
© Irish Examiner Ltd. All rights reserved