Manufacturing gains momentum as export orders rise

The manufacturing sector gained momentum in November, hitting an eight-month high as companies reported a surge in new export orders from Asia, Europe and the US.

The Investec Manufacturing PMI Ireland report also showed faster rises in output, new orders and employment, with the headline PMI (purchasing managers' index) rising to 53.7, from October's 52.1 reading.

The index noted that a rise in export orders fuelled the fastest increase in backlogs of work since the data began in 2002, speculating that some clients may have been withholding orders pending the outcome of the US election. The seeming reduction in risk of a “hard Brexit” may also have contributed.

As client demand rose, manufacturing firms also stepped up their quantity of purchases, which hit a three-month high in growth, and hiring activity. The employment index also grew, recording its fastest growth for 16 months. But stocks of purchases fell yet again, marking a seventh-month decline, and the stocks of finished goods index hit its fastest rate of depletion since April 2012.

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Input price inflation rose again, as the cost of raw materials rose and the depreciation of the euro against the US dollar bit. Some of these costs were passed on in higher output prices, which increased slightly in November.