THE RATE of decline in Irish manufacturing slowed last month 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 14th month in a row, output fell sharply, with the pace of reduction last month close to the series record in February.
Brian Devine, economist at NCB Stockbrokers, said that while there were some positive signs, it was too 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.
“[But] the reality is that economies across the globe are still contracting and will continue to do so for some time, with a consequent rise in unemployment,” he added.
Decline in new orders eased last month. The fall remained significant due to the wider slowdown, with a reading of 39.5. Employment dropped at the second-fastest rate in the survey’s 11 years, as firms let go staff due to lower demand and a bid to cut costs.
Dermot O’Leary, chief economist at Goodbody Stockbrokers, said the main source of manufacturing optimism was that export data had been relatively positive. “We’ve seen collapses across the world, but Ireland is situated in sectors which are less sensitive to these kind of cycles.”
CSO data released this week showed 15,800 people signed on for jobseekers’ benefits in April, bringing the unemployment rate to 11.4 per cent and numbers on the Live Register to 388,600.
Output prices dropped at a record pace due to falling demand. The cost of raw materials dropped as manufacturers negotiated price reductions with suppliers.
British manufacturing rebounded somewhat in April as weak sterling supported exports. A CIPS/Markit PMI survey out yesterday showed a rise to 42.9 in April from 39.5 in March, ahead of analysts’ expectations. In the US new orders declined in March, the seventh fall in eight months, data showed, signalling that the recession may be far from abating.
