While activity in the country's manufacturing sector continued to decline in October, the sector moved a step closer to recovery with both output and new orders falling only slightly.
The NCB Purchasing Managers' Index (PMI), which measures manufacturing activity, rose to 48 from 46.6 in September. This was the highest level since February 2008 as the index approaches the 50 mark that separates growth from contraction.
'With global economic activity gathering momentum we are still hopeful that the Irish economy will begin growing in fourth quarter of this year and the latest PMI was comforting in this regard,' said Brian Devine, economist at NCB Stockbrokers.
Production fell for the 20th month in a row in October, but NCB said that the rate of contraction was the slowest seen in those 20 months.
Today's index shows that new business decreased at the slowest pace in the 20 months of reduction. However, new business from abroad fell slightly after rising marginally in September. Companies said the relative strength of the euro compared to sterling led to falling new business from the UK.
NCB reported further declines in backlogs and employment which resulted from spare capacity. Outstanding business has now fallen for 40 months in a row.
'Along with workforce restructuring, attempts to reduce costs were a key factor behind the latest drop in staffing levels, which was marked,' NCB said.
Input costs fell again in October as the weakness of sterling make UK produced inputs relatively less expensive. While output charges eased to its weakest since January, pressure from both customers and competitors to reduce prices remained intense.
Today's survey also shows that although purchasing activity fell again during the month, the latest reduction was the weakest since February 2008.
