Ireland’s position as the eurozone’s fastest-growing economy was underlined yesterday by data showing the country’s manufacturing sector outshone most of its counterparts last month to reach an eight-month high.
The chief barometer of the sector’s health — the monthly manufacturing purchasing managers’ index (PMI) from Investec Ireland — showed a reading of 54.9 for March; up from 52.9 in February. Anything above the neutral 50-point mark constitutes a sector in growth mode.
The rise was driven by a strong growth in new orders, while employment levels grew for the third straight month and by their fastest since last July. Investec, however, noted that the recent pace of growth is slower than that seen in 2014 and the first half of 2015.
“Our mantra for some time has been that ‘Ireland will not be immune to any slowdown in international trade’. However... it is clear that Irish manufacturers are confident that they can safely navigate through choppier waters,” said Philip O’Sullivan, chief economist at Investec Ireland.
On a broader footing, eurozone factories rounded off the first quarter in slightly better shape than initially thought, but growth in activity remained weak despite the deepest price-cutting since late 2009. A wider eurozone PMI yesterday suggested manufacturing is still dragging on the wider economy, and growth remained weak in Germany, while activity contracted in France. But Spain, Italy, the Netherlands, Austria, and in particular Ireland, saw robust expansions.
British manufacturing growth edged up in March from its weakest level in nearly three years, suggesting the sector will contribute little to Britain’s economic growth in early 2016. The Markit/CIPS manufacturing PMI rose to 51.0 last month from 50.8 in February, rounding off one of its weakest quarters in three years.
“Industry is still hovering close to the stagnation mark and will struggle to make a meaningful contribution to the next set of GDP growth figures,” Rob Dobson, senior economist at survey compilers Markit said.
“The survey suggests the near-term prospects for the manufacturing sector remain fairly poor. But we still expect things to look up as the year progresses,” added Ruth Miller, UK economist with Capital Economics, as economists said the Brexit referendum is likely to weigh on growth.
© Irish Examiner Ltd. All rights reserved