The latest NCB Republic of Ireland Manufacturing PMI shows a pick-up in the rate of growth of the manufacturing sector in February, with the headline PMI improving to 51.5 from January’s 50.3 outturn.
Within the data we see that New Orders made a welcome return to growth after sliding into negative territory for the first time in 12 months in January. Panellists reported signs of strengthening demand and the securing of new clients. New Export Orders rose, albeit marginally, for a fifth successive month, with improved demand from the UK market cited as a reason for the latest increase.
Another component that recorded a welcome return to growth during February was the Employment category, following last month’s decline which snapped a run of 10 months of expansion. Encouragingly, this improvement was partly attributed to expectations of higher production requirements over the coming months. On the pricing front, input prices rose in February at the same rate of inflation as had been seen in January. Supply shortages were blamed for these latest cost pressures. However, on a more welcome note, Irish manufacturing firms were able to increase output prices during February – the fourth occasion in the past six months that they have been able to mitigate input cost pressures with higher output prices.
In all, with the headline PMI reading pointing to a 12th successive month of growth for the Irish manufacturing sector, and the rate of expansion improving from the 9 month low in January, this is a solid outturn.
Philip O’Sullivan, Chief Economist.