Manufacturing contracts to record low

The manufacturing sector contracted at a record rate last month as it fell to its lowest level in the 10-year history of the survey.

The purchasing managers' index (PMI) published by NCB Stockbrokers showed a new record low in its reading of 44.7 in April.

The index measures output, new orders, export orders, employment, stock levels and prices and any reading below the 50 mark indicates contraction. The PMI has been below 50 for the last five months.

According to the latest survey, output and new orders declined at record rates last month, falling markedly due to weakening domestic and export demand.

The reduced workloads prompted many firms to "markedly" reduce their workforce last month and April was the fifth consecutive month that manufacturing employment contracted.

NCB senior economist Eunan King said the data was reflecting external factors such as weakness in the UK and the US.

He also said the weak reading for new orders of 42.6 in April indicated that the situation "is not going to improve any time soon".

The data indicates the sharpest contraction in new business for 58 months with combination of the strong euro and weaker global economic conditions leading to a fall in export demand.

Rising raw material and oil costs also affected many firms last month, with manufacturers saying that prices for metals, oils and plastics rose at their fastest pace in April since May 2006.