THE MANUFACTURING sector expanded marginally in April, as a contraction in output was offset by a rise in new orders and export business.

The headline NCB Manufacturing PMI edged just above the 50 level that separates expansion from contraction, at 50.1.

Output for the month shrank, registering 48.7 – the first fall in three months, prompting concerns about the momentum of the sector’s recovery. But there was some optimism about the domestic economy, and new orders continued to increase, while firms took on staff at a faster pace. New orders were 51.4, while export orders were 53.1 over the month.

“Although slowing from the previous month, the rate of expansion was still solid,” NCB said. “Anecdotal evidence pointed to higher new orders from Asia and the US.”

Employment registered 52.9, the second consecutive rise, and the sharpest since April 2011. “The domestic part of the economy is starting to look a bit better and tomorrow’s unemployment data should show a further tick down in the unemployment rate,” said NCB’s Brian Devine. “The external data, though, is a drag, particularly from the euro area, and as a result industrial production was down 3.9 per cent in the quarter to February 2012.”

Elsewhere, figures from the United States and China pointed to a global economic recovery still on track in April, with the pace of growth in both economies’ manufacturing sectors picking up. However, British manufacturing output barely grew at all in April.

– (Additional reporting Reuters)