Business conditions in Ireland's manufacturing sector improved last month as new orders increased, but employment fell for the third month in a row, according to the Purchasing Managers' Index that was published today.
The seasonally adjusted NCB/NTC PMI, which measures activity in manufacturing, rose for a second successive month to 51.4 in July from 50.7 in June.
NCB Chief Economist Dermot O'Brien
That reading was the highest since February, although it pointed to only a modest rate of industry growth, the survey showed. Any reading above 50.0 indicates growth in the sector.
"The pace of growth in manufacturing activity strengthened further in July," NCB Chief Economist Dermot O'Brien said.
"Though the expansion remains modest, trends are improving in an encouraging way with output and orders growing more solidly than a couple of months ago. Employment fell again in July but the decline was fractional and a resumption in hiring seems imminent."
Rising levels of incoming new work underpinned expansion of the manufacturing sector in July, and panel firms attributed growth in new orders to new products and sales promotions. They linked a rise in new export orders for the second consecutive month to healthy demand from the United Kingdom and Scandinavia.
In response to the continued improvement in new orders, Irish manufacturers stepped up production again in July.
Despite the latest gains in output and new orders, staffing levels in the Irish manufacturing industry declined for a third successive month. However, the pace of job shedding was marginal and weaker than rates recorded in May and June.
Irish manufacturers signalled a sharp rise in average costs in July as fuel and energy costs increased because of high oil prices, but firms were also able to increase their average prices charged in the month.
"However, the rate of output price inflation remained below the equivalent measure for input costs," the survey said.