Manufacturing activity contracted in March - NCB

Tuesday 02 April 2013 11.32
NCB's PMI rate was down by almost three points last month
NCB's PMI rate was down by almost three points last month

Activity in the manufacturing sector contracted for the first time in 13 months during March, according to the latest Manufacturing Purchasing Managers Index from NCB Stockbrokers.

The headline PMI reading stood at 48.6 last month, down from 51.5 in February, with new orders a key factor behind the decline.

New export orders also fell into negative territory during March, with the rate of contraction at the sharpest level seen since August 2009.

"This is a disappointing release, with declines observed on the output, new orders and employment fronts," said Philip O'Sullivan, chief economist at NCB Stockbrokers.

"We will closely watch April's release to see if any of these trends have persisted into Q2, paying particular attention to see if the elevated macroeconomic uncertainty of recent days and weeks weigh on survey findings."

Manufacturing contributes around one quarter of Ireland's gross domestic product, according to World Bank figures.

The contraction in Irish manufacturing tallied for the first time in over a year with activity for the euro zone as a whole as reflected in flash PMI data released in mid-March.

Irish manufacturing has consistently outperformed the euro zone average over the past 12 months, and the survey reached a 15-month high of 53.9 in July last year.