Business conditions for Ireland's manufacturers worsened last month after hitting a six-year high in June, a survey showed this morning.
The seasonally adjusted NCB/NTC Purchasing Managers' Index (PMI), which surveys about 250 companies to assess the health of Ireland's manufacturing sector, slipped to 54.7 in July from 55.4 in June, which had been the highest level since May 2000.
Growth in the manufacturing economy has now been recorded for thirty-five months in a row.
"The PMI shows that the buoyancy in manufacturing activity has continued," said Dermot O'Brien, chief economist at NCB Stockbrokers. "The recovery in manufacturing employment now looks more solid and is being supported by strong growth in output and orders.
"The latest survey also shows some improvement in inflation pressures in the sector with easier rates of increase in costs and in output prices in July," he added.
The survey found the overall improvement in operating conditions indicated by the PMI in July was supported by strong expansions of both output and new orders.
Staffing levels rose for the fourth month in a row, while suppliers' delivery times lengthened.
In July, the rate of growth of production in the Irish manufacturing economy remained broadly in line with the 23-month high recorded in June.
Irish manufacturers recorded a strong expansion of new order volumes, but at a slightly less marked rate than June's 74-month high. Firms widely linked new work growth to an improvement in demand conditions.
Expansion of overall new work was supported by an increase in foreign business, although the rate at which new export orders rose was the least marked in the current four-month growth period, the survey showed.
Irish manufacturers reported an increase in input buying in July and a sharp increase in input costs, with firms paying higher prices for metals, particularly steel and fuel. However, the rate of cost inflation eased.