03 Mar 2014

Irish manufacturing sector recorded growth in February

Filed under: Business News

IRELAND’s manufacturing sector recorded further growth in February but the rate of expansion eased for the second consecutive month, and was the slowest since last June.

But while the rate of growth in production may have fallen back, new orders increased at a faster pace resulting in new employees being taken on.

The latest Purchasing Managers’ Index (PMI) for the sector, released this morning, reported an increase in employment for the ninth consecutive month.

Manufacturing in the euro zone also continued to grow but there was a modest slowdown compared with January’s 32 month high.

And the strong recovery in the UK continued last month, with employment in the manufacturing sector there rising at the fastest pace since May 2011.

Philip O’Sullivan, economist with specialist bank Investec, said employment was the highlight of the Irish data.

“The survey shows that employers added to payrolls for a ninth successive month in February, with the pace of increase improving to a four month high,” he said.

“This job creation was underpinned by rising new orders (which expanded at the second fastest pace in the current eight month sequence of growth).

“New orders were aided by improved demand from the UK and Europe, which chimes with the pick-up in economic indicators in those crucial trading partners for Ireland.”

The PMI rate hit 52.9 in February, up fractionally from 52.8 the previous month. Anything above 50 indicates expansion while below that signals contraction.

PMIs are regarded as important forward looking indicators of the health of an economy and are therefore closely watched by analysts and economists.

The euro zone PMI reading hit 53.2, above earlier predictions of 53. This means Ireland is just fractionally below the euro area average.

The Netherlands rose back to the top of the PMI league table. Germany and Austria remained among the strong performers.

Although France remained in contraction mode at 49.7, the reading was a five month high.

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