Rate of fall in Irish manufacturing slowing

The rate of Irish manufacturing decline slowed somewhat in April although it still contracted at the third-fastest rate on record, according to a new report.

The NCB Purchasing Managers' Index (PMI) which measures activity in the Irish manufacturing sector rose to 36.1 from 35.1 in March, a second successive rise but still far below the 50 mark separating growth from contraction.

For the fourteenth month output fell sharply with the pace of reduction last month close to the series record in February.

Brian Devine, economist at NCB Stockbrokers said there were some positive signs but said it was tooo early to talk about real “green shoots” in the economy.

“As in other parts of the world, the Irish manufacturing PMI was up for a second month running and it is quite possible that it has bottomed out," Mr Devine said.

“The reality is that economies across the globe are still contracting and will continue to do so for sometime with a consequent rise in unemployment," he added.

The pace of decline in new business eased last month although the fall remained significant due to the wider economic slowdown.

Employment levels in manufacturing fell at the second-fastest rate in the 11-year history of the survey as firms let go staff due to lower demand and in a bid to cut costs.

Data released from the Central Statistics Office this week show that 15,800 people signed on for job seekers’ benefits in April, brining the unemployment rate to 11.4 per cent and the numbers on the Live Register to 388,600.

Output prices dropped at a record pace in response to falling demand while the cost of raw materials also dropped as manufacturers negotiated price reductions with suppliers.

Because of the fall in new business companies transferred spare capacity to existing projects with the result that backlogs of work also fell sharply last month.