Irish manufacturing output slowed to 19-month low in September
While business conditions in the Irish manufacturing sector improved again in September amid marked growth of new business, the rate of expansion in production slowed to a 19-month low. Meanwhile, input prices fell for the first time in seven months amid falling prices for oil-related products and other raw materials — Irish manufacturing prices track movements in the dollar/euro rate as American-owned firm dominate the sector.
The seasonally adjusted Investec Purchasing Managers’ Index (PMI ) – an indicator designed to provide a single-figure measure of the health of the manufacturing industry – rose to 53.8 in September from 53.6 in the previous month. This signalled a solid and slightly greater strengthening of the health of the sector during the month. However, the latest improvement was still weaker than those seen earlier in the year.
Supporting the overall improvement in operating conditions was a marked increase in new orders. Panellists reported that rising new business from abroad had helped to support growth of total new orders. New export business increased sharply, with the rate of growth slightly stronger than in August.
Panellists mentioned the UK as a key source of new business. While production continued to rise, the rate of expansion slowed for the second month running and was the weakest since February 2014. Some panellists reported that production volumes had been higher than new business in September, thereby resulting in a second consecutive monthly fall in backlogs of work.
Markit said this also contributed to a further accumulation of stocks of finished goods, the third in as many months. Input costs fell at a solid pace, ending a six-month sequence of inflation. Lower prices for oil-related items, food and steel were mentioned by those respondents seeing input costs decrease.
Output prices also fell, linked both to lower input costs and requests from customers for discounts. Employment increased for the twenty-eighth consecutive month during September amid rising workloads. The rate of job creation was solid and faster than that seen in August.
"The recent slowdown in the rate of growth of purchasing activity continued, with the latest rise the weakest in the current 20-month sequence of expansion. Panellists expressed some caution with regards to purchasing amid an easing in growth of demand compared with earlier in the year. The time taken to deliver inputs by suppliers lengthened modestly again in September. Stocks of purchases increased for the first time in seven months as a result of growth in purchasing in previous months and a weaker rise in production."
Chemicals + medical devices accounted for 58% of goods exports in 2014 up from 46% in 2005 while employment slightly fell over the decade.
Pic above: The Pfizer Biotechnology Campus, Grange Castle, West Dublin.