Business conditions in the manufacturing sector improved in October for the 14th consecutive month. However, the growth was at the slowest pace since September 2003, according to the latest Purchasing Managers Index from NCB Stockbrokers.
The seasonally adjusted PMI - an indicator designed to provide a measure of the economic health of the manufacturing sector - stood at 51.4 in October, down from September figure of 52.6. Any reading above 50 represents growth.
NCB said the level of PMI was indicative of only a modest improvement in business conditions.
'The PMI suggests that the pace of manufacturing growth slowed in October,' commented Eunan King, Senior Economist in NCB Stockbrokers.
'This would appear to have been mainly because of weaker export orders. It is, however, encouraging that employment continued to grow. Input prices rose strongly as oil and metal prices firmed,' he added.
NCB said the latest improvement in operating conditions was underpinned by further growth of incoming new orders, which rose for the 14th month in a row. However, the rate of expansion of new business eased for the third month in a row and was only slight.
It said that slower growth of overall new orders reflected a slight decline in the volume of new businesses placed with Irish exporters, which fell for the first time in a year. This was mainly due to weaker demands from the key US and Japanese markets. Companies also cited rising competition from low cost producers in the Far East and cheaper Eastern European imports.
Average prices paid for inputs rose sharply again last month for the 15th month in a row. Panel firms linked these higher costs to soaring world oil prices and to rising metal prices, especially steel.
NCB said that employment in the manufacturing sector recorded more growth in October.
