January's big freeze hit factory output
Monday, 1 February 2010 11:18The bad weather the country experienced last month resulted in the fastest reduction in manufacturing production seen since last August.
The seasonally adjusted NCB Purchasing Managers Index fell to 48.1 in January from a reading of 48.8 in December. Any figure below 50 means activity was weaker.
Output fell at a sharper pace than in the month before, while new business contracted for the first time in three months. NCB said that unusually bad weather conditions made some roads impassable, impacting negatively on output, new orders and supplier performance.
'The adverse weather conditions which prevailed in early January caused havoc with businesses on both the supply and demand front,' commented Brian Devine, economist at NCB Stockbrokers.
'Consequently it is difficult to decipher whether the fall in demand was solely due to the weather or simply that demand continues to remain weak,' he added.
Today's index reveals that production fell at its sharpest pace in five months. Except for a slight rise in November 2009, output has contracted in each month since March 2008. New business also fell for the first time in three months in January.
However, new export orders increased in January, in contrast to the trend for overall new business. The rate of expansion accelerated to its fastest in October 2007 as firms moved into new export markets.
The January figures also show the first rise in input prices in 15 months as commodity prices rose. But output prices continued to decrease due to continued intense competitive pressures.
