Manufacturing production showed some improvement in October, rising on an annual basis, but falling month on month, new data showed today.
In the year to the end of October, the volume of production was up 8.3 per cent, with the index at 107.3. September's manufacturing production index was 113.6, meaning the index fell 5.6 per cent.
Over the three-month period from August to October, the seasonally adjusted volume of industrial production fell 7.3 per cent compared to the preceding period. The industrial turnover index was also lower, declining 3.3 per cent.
However, in the year to October, turnover was 15.5 per cent higher than in the same month a year earlier.
But Bloxham's chief economist Alan McQuaid was still optimistic for the full-year figures. "Despite some signs of a weakening of activity in the near-term, it still looks like there will be a healthy average increase in manufacturing output for 2010 as a whole of at least 6 per cent," he wrote in a note.
The modern sector, which comprises a number of high-technology and chemical sectors, showed an annual increase in production of 9.4 per cent in October, while the traditional sector showed a more modest growth of 5.2 per cent.
"Even allowing for some adverse exchange-rate movements since the beginning of July, it does now look like the 'indigenous' sector has become more competitive and found a solid footing, which augurs well for the months ahead," Mr McQuaid said.
Within the particular industry sectors, production was 7.4 per cent higher in the basic pharmaceutical products and preparations sector, while the other manufacturing rose by 22.5 per cent.
Mr McQuaid said external demand will be key to how Irish manufacturers perform in the coming months.
"That said, Irish manufacturers are benefiting from improved competitiveness, with the lowering of the cost base arising from the decline in wages and prices across the economy expected to place Ireland in a very favourable position to benefit from the eventual recovery in trade flows," he said.
But he warned any expected rebound in output or exports could be held back by "sector-specific effects". "For instance, the chemicals sector, which accounts for around half of overall Irish merchandise exports, is expected to face somewhat limited upside potential amid the recovery in world trade in view of the slightly acyclical nature of demand for its output," he said.
