Manufacturing sector sees 8th month of growth in a row

Monday 03 February 2014 18.21
Investec's Manufacturing Purchasing Managers' index eased 52.8 in January from 53.5 in December
Investec's Manufacturing Purchasing Managers' index eased 52.8 in January from 53.5 in December

Activity in the country's manufacturing sector grew for the eighth month in a row in January, but at a slightly slower pace than in December, a survey showed today.

Investec's Manufacturing Purchasing Managers' index fell to 52.8 in January from 53.5 in December, when it recorded its second-highest reading in almost 18 months.

But the index remains well above the 50 line dividing expansion from contraction.

That put Ireland behind the 53.9 flash reading recorded for the euro zone as a whole last month, the highest since May 2011. 

"Although production growth slowed in January, new orders remained relatively robust, with improved demand reported from both domestic and export customers. Once again, the UK market was highlighted as a source of particular strength," Investec Ireland's chief economist Philip O'Sullivan said.

"Today's report represents a solid, if unspectacular, start to 2014 for the manufacturing sector. Broadly speaking, with activity having grown in every month since June 2013, the underlying trend remains intact," he said.

Unemployment has fallen to 12.4%, just above the euro zone average, from a 2012 high of over 15%. January's manufacturing data showed employment grew across all three groups of investment, intermediate and consumer goods.

The PMI sub-index measuring employment rose to 53.9 from 52.8 in December and has also grown for eight months in a row.

Growth in new export orders bounced back from a five-month low thanks mainly to solid growth in the UK.

The January data pointed to a marginal reduction in output prices at manufacturing firms, ending four months in a row of increased selling prices. Companies said that competitive pressures had contributed to the fall in prices charged.

But in contrast to the trend for output charges, input costs rose last month. Investec said the rate of inflation was broadly in line with those seen in recent months, remaining weaker than the series average.