Irish Economy 2014; The Irish manufacturing PMI sector recorded a further solid improvement in business conditions in February. The rate of growth in production eased, but new orders increased at a faster pace, leading firms to raise their rate of job creation. However, the impact of the drugs patent cliff on output has not been reflected in the survey data through 2013 when official data showed that industrial production fell.

Pharmaceutical exports account for about 50% of Irish merchandise exports.

The seasonally adjusted Investec purchasing managers' index (PMI) - - an indicator designed to provide a single-figure measure of the health of the manufacturing industry - - posted 52.9 in February, up fractionally from a reading of 52.8 in January. This represented a further solid improvement in operating conditions in the sector, and the ninth in as many months. Input cost inflation remained broadly stable, while manufacturers lowered their output prices for the second month running.

Although Irish manufacturing production rose again in February, the rate of growth eased for the second consecutive month and was the slowest since June 2013. This was despite the rate of expansion in new orders picking up from that seen at the start of the year.

Those firms that recorded a rise in new orders generally mentioned improving client demand. Rising new business from the UK and other European markets was reported by firms as having contributed to an eighth successive monthly increase in new export orders.

Manufacturers partly used inventories to help fulfil new orders in February, leading to reductions in both stocks of finished goods and backlogs of work. Moreover, in each case rates of depletion accelerated from the previous month.

Employment increased for the ninth consecutive month amid reports of rising production requirements. The rate of job creation was solid, having quickened for the second successive month to the strongest since last October.

The rate of input cost inflation was broadly unchanged and has remained virtually stable over the past five months. Some panellists mentioned increased timber prices. In contrast to the rise in input costs, output prices decreased for the second month running amid strong competition. Moreover, the rate of decline quickened from that seen in January.

Panellists reported that recent stormy weather had contributed to longer suppliers' delivery times, although the latest deterioration was the weakest in five months.

Firms raised their purchasing activity in February, following a fall in January. Panellists reported that the increase was part of efforts to build inventories. Despite this, stocks of purchases continued to fall at a solid pace. Pre-production inventorie

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