Manufacturing sector shrinks in July

Ireland’s manufacturing industries saw a fall in activity in July, declining by almost 9 per cent.

Both the traditional and the modern sector shrank compared with June, with a marked fall-off in the modern sector as the pharmaceuticals industry was hit by patent expiries.

According to the latest data from the Central Statistics office, manufacturing volume in the three-month period from May to July was up 1.7 per cent compared to the first quarter of the year.

Merrion Stockbrokers’ Alan McQuaid said the figures painted a “mixed picture”.

“In the first seven months of 2013, output was 3.7 per cent lower on average than in the same period last year,” he said.

The modern sector, which includes pharmaceutical and high tech industries, was down almost 11 per cent in the year to July, following a 1.7 per cent rise in the year to June.

“Pharmaceuticals fell sharply in both the month and the year in July, again mainly reflecting the patents expiry issue on certain products, although weak global demand was clearly an issue here too,” Mr McQuaid said.

Davy Stockbrokers’ David McNamara said such swings were now commonplace in the market.

Meanwhile, the traditional manufacturing sector was down 2 per cent in the month, but it was 1.6 per cent higher in the year, the second annual rise in a row.

Mr McNamara described the fall in output as “disappointing, but said improving conditions in the eurozone mean that the outlook was more positive.

That was echoed by Merrion’s McQuaid.

“The general weakness in the UK economy as well as the depreciation of the pound have impacted negatively on the Traditional sector in recent months, though this now appears to be turning around, which is welcome news,” he said.