Manufacturing expands in March
THE IRISH manufacturing sector expanded in March, bucking a euro area trend and increasing output, new orders and employment.
The NCB Manufacturing PMI index, which measures the health of the manufacturing industry, rose to 51.5 in March, from 49.7 a month earlier, ending the quarter on a more positive note.
“Although only slight, the improvement in operating conditions was the first in the past five months,” NCB said. Output was higher at 52.8, compared with 50.4 a month earlier.
“This result is in contrast to the Flash PMIs in the euro area which signalled contraction,” said NCB chief economist Brian Devine. “The outperformance is likely driven by Ireland’s greater exposure to the US, which has been performing relatively robustly lately.”
The increase in new orders for the month was “solid” as new products helped lift demand. The index rose to 52.7 for the month, the second consecutive month of growth and the sharpest pace in 10 months. Export orders reversed February’s loss, reaching 55.1 in March. According to the survey, some respondents noted rising orders from Asia
The backlog of work at manufacturing firms also showed some signs of nearing stabilisation in March, with the rate of depletion much weaker than in February.
Employment in the sector rose slightly, the first increase in three months, with increased new business driving recruitment in consumer and investment goods producers. Production, meanwhile, increased at the fastest pace in 11 months.
However, manufacturers were also facing higher costs in March, with the rate of input cost inflation rising at the sharpest rate since June 2011 as oil-related products pushed costs higher. In contrast, output prices were forced lower by intense competition.
Across the euro zone, the manufacturing sector shrank for an eighth month and at a faster pace in March, adding to signs the bloc is in recession as the downturn spread to core members France and Germany. Markit’s Euro zone Manufacturing PMI dropped to 47.7 last month from 49.0 in February.
In the US the pace of growth in the manufacturing sector picked up very slightly in March. British factory activity expanded at its fastest pace in 10 months.
Additional reporting: Reuters