Business conditions in the Irish manufacturing economy continued to improve in December, according to the latest NCB Purchasing Managers' Index.
The index registered 52.6 in December, remaining above the critical 50 mark that divides growth from contraction for the fourth successive month. The rate of improvement in business conditions was slightly less marked than in the previous month, when the index recorded 52.8, but was still the second strongest since July 2002.
NCB economist Eunan King said acceleration in the growth of new orders, in particular export orders, was encouraging. But he pointed out that the pick-up in activity had not yet been enough to boost employment. The employment index of 49.4 signalled a slight drop in employment for the first time in three months.
Manufacturing new orders, the PMI's most forward looking component, rose for the fourth month running in December. The rate of growth of new business continued to gather pace, and was the strongest since June 2002.
Panel firms reported that the recovery in new orders recorded since September was again driven by improved global economic conditions. This was highlighted by December's data on new export orders, which showed the volume of foreign sales rising at the fastest rate for four years. Panel firms reported that demand had been particularly buoyant from clients in the euro zone and the US.
Manufacturing production levels were raised for the fourth successive month in December, primarily to meet further significant growth of new orders. The rate of expansion of output was only marginally less marked than November's 17-month high.
