Manufacturing continues to benefit from weak euro

Ireland’s manufacturing sector remains in expansion mode with the weak euro continuing to bolster trade.

However, Investec’s latest Manufacturing Purchasing Managers’ Index (PMI) indicates a slight weakening in the pace of growth for April.

The headline PMI came in at 55.8, down from 56.8 in March, but comfortably above the 50 mark that indicates growth.

Activity in sector has now expanded for 23 consecutive months.

The survey indicated more than twice as many firms reported a rise in new orders compared to those who saw a decline.

Firms said new product launches and the weakness of the euro helped improve sales, with the UK and US identified as key sources of new business.

Another positive was the sub-index for employment which posted another rise in hiring last month, extending the current sequence of job creation to 23 months.

Despite this investment in headcounts, backlogs of work increased, albeit slightly, for a third successive month in April.

Input prices, however, rose sharply for a second successive month in April, with respondents attributing this to the euro weakness.

“We are not particularly surprised by the slight moderation in the headline PMI. Previously published flash euro zone PMI releases for April indicate that growth in activity across the currency union was a touch lower than in the previous month.”

"CSO data show that 36 per cent of Irish merchandise exports go to the countries that share the euro," said Investec Ireland chief economist Philip O'Sullivan.