Ireland’s manufacturing sector grew in August at its fastest pace in 14 months, suggesting the economy’s recovery from a second recession in five years is gaining momentum, a survey showed today.
Ireland pulled out of recession in the second quarter and growth remains anaemic, though recent indicators point to a pick-up in the second half as it approaches completion of an €85 billion EU/IMF bailout late this year.
The Investec Manufacturing Purchasing Managers’ Index rose to 52.7 in September from 52.0 in August, moving further above the 50 line dividing growth from contraction and hitting its highest since July 2012.
It was the fourth successive month of expansion following a three-month dip to the end of May.
“We would not be surprised to see a further pick up in the rate of growth in the sector in October,” Investec Ireland chief economist Philip O’Sullivan said.
“With the outlook for export demand underpinned by improving economic indicators across many of Ireland’s key trading partners – the U.S., UK and euro zone – and a more stable domestic backdrop, we are confident that the recent momentum will be sustained into 2014.”
Manufacturing accounts for about a quarter of Irish gross domestic product, according to World Bank figures.
Ireland will present its latest austerity budget in two weeks time, but the tepid return to growth in the second quarter raises doubts over official forecasts for the year and may dash hopes of easing up substantially on the depth of cuts.
The subindexes measuring input and output prices both hit their highest levels this year.
The new orders subindex slipped slightly to 53.5 in September from 53.6 in August. Source: Reuters