New figures show that the manufacturing sector contracted at the slowest pace since last September in June. Fragile domestic demand was offset by the slower decline of new export business, the NCB Purchasing Managers' Index (PMI) shows.
The index, which measures manufacturing activity, rose for the fourth month in a row to 42.5 in June from 39.4 in May. But it still remains below the 50 mark separating growth from contraction.
'Even when the PMI does breach the 50 mark it is highly unlikely to be matched by a rise in employment in the sector,' commented Brian Devine, economist at NCB Stockbrokers.
The latest round of redundancies was the smallest since last November, but employment continued to decrease at a 'severe' pace, the survey reveals. Employment levels have now fallen in each of the past 19 months.
Output in manufacturing industries rose to 44.7 in June from 40.4 in May. This indicated continued contraction, but was still the best performance for 10 months.
New export orders fell 'solidly' again in June, though less sharply than overall new business and slower than in any of the preceding nine months, today's survey shows.
The relative strength of the euro against sterling made it harder to secure business from the UK, it noted. Suppliers continued to offer steep discounts to boost demand, but input prices fell at the weakest pace so far in 2009.
Separate figures showed that manufacturing activity in the euro zone hit a nine-month high point in June.
The euro zone's purchasing managers' index (PMI) for the manufacturing sector, compiled by data and research group Markit, rose to 42.6 points from 40.7 points in May, slightly above an earlier estimate of 42.4.
