PRODUCTION AT Irish manufacturing firms rose in November, bringing an end to a 20-month contraction and adding weight to predictions that the economy is stabilising.
The NCB Purchasing Managers’ Index (PMI), which provides a snapshot of the health of the manufacturing sector, inched closer to the tipping point of 50, rising from 48 to 48.8. Any reading above 50 indicates that the overall manufacturing economy is expanding.
More encouragingly, a sub-index showed that manufacturing output increased, ending a contraction that has lasted since February 2008. Output was driven higher by stronger levels of new orders. Demand from overseas was particularly resilient, with new export orders increasing for the second time in three months.
NCB economist Brian Devine said the latest output readings corroborate what other indicators have been showing: “that the Irish economy is stabilising and forming a base from which to grow”.
This interpretation was shared by Bloxham chief economist Alan McQuaid. “By and large the numbers are getting better,” he said. Although the economy is still contracting, it is heading in the right direction.
As has been the case each month since December 2007, employment in the sector continued to fall in November as manufacturers downsized in response to excess capacity. However, the rate of decline in employment was the slowest recorded in a year and a half.
