Manfacturing growth reaches six-month high

Growth in Ireland’s manufacturing sector rose to its highest level in six months in January.

According to Investec’s monthly Purchasing Managers’ Index (PMI), a measure of the health of the manufacturing industry, the sector saw a positive start to 2016 as the headline PMI rose to 54.3 in January. Increasing slightly from December’s 54.2 reading, this month’s PMI reading is the highest in six months.

Philip O'Sullivan, chief economist at Investec Ireland, said that a key highlight of the report is new orders, "which reveals a sharp and accelerated expansion, extending the current run of positive readings to 31 months".

“We are also encouraged to see that the rate of growth in New Export Order improved to a six month high, notwithstanding some of the unhelpful moves we’ve seen in the currency markets in recent weeks,” he added.

The employment index rose modestly, while falling prices in global commodity markets led to another reduction in input costs, with panellists noting lower prices for oil and metals including copper and steel. This was the strongest reduction in costs in three months. However, some of these gains were offset by a drop in output prices, the first in three months.