Despite the first rise in manufactured output for 21 months, overall operating conditions in the manufacturing sector continued to worsen in November.
The latest NCB Purchasing Managers index rose slightly in November to 48.8 from 48 in October. Any figure under 50 signals contraction, while a figure over 50 indicates growth.
Operating conditions in the industry have now deteriorated throughout the past two years, however this latest survey points to a stabilising of the economy.
Both output and new business both expanded for the first time since February 2008. NCB said that higher output mainly reflected new order growth, which in turn was attributed to strengthening demand.
New export orders rose for the second time in three months, and at a faster pace than overall new business. But despite the expansion in new business, NCB said that firms continued to complete outstanding work as the space capacity from the severe economic downturn remained evident.
November saw another marked reduction in employment levels, with the rate of job cuts quite similar to those seen in each of the previous three months. However, NCB noted that the decline was the weakest since May 2008.
Today's survey shows that input costs fell for the 13th month in a row, as firms were able to negotiate cheaper prices from suppliers. Output prices also fell at a faster pace last month as intense competition and scarce demand forced companies to offer discounts.
NCB economist Brian Devine said that while the headline PMI figure did not breach the 50 mark, both output and new orders expanded in November for the first time since February 2008. He said that increased demand, especially from abroad, drove new orders higher.
'The latest output readings are encouraging and corroborate what a number of other indicators have been showing, the Irish economy is stabilising and forming a base from which to grow,' he added.
