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    Wednesday
    May012013

    Irish manufacturing shrinks at fastest rate in 19 months

    Deteriorating economic conditions weaken orders for goods at home and abroad

    Irish manufacturing shrank at its fastest rate in 19 months in April as sluggish orders both at home and from abroad led to the sharpest contraction in output since August 2009, a survey has shown.

    The NCB Manufacturing Purchasing Managers’ Index, which fell below the 50 line dividing growth from contraction for the first time in more than a year in March, dropped further to 48.0 in April from 48.6 in the previous month.

    The poor PMI data adds to the less positive tone of recent data releases as the recession hitting much of the rest of Europe eats into export growth and a still-struggling domestic economy hurts retail sales.

    “On the evidence of today’s report, Q2 has gotten off to an uninspiring start for the Irish manufacturing sector,” said Philip O’Sullivan, chief economist at NCB Stockbrokers.

    “Panellists cited weakening market demand, fuelled by deteriorating economic conditions in Ireland and across Europe, as a key factor behind this softer reading. The sluggish new orders, new export orders and stocks of purchases readings suggest that a near-term recovery in output is unlikely.”

    The Government expects the economy to grow modestly for the third year in a row this year, but trimmed its forecast for growth yesterday after the economy contracted in the third quarter of 2012 and was flat in the fourth.

    Manufacturing accounts for about a quarter of Ireland’s gross domestic product, according to World Bank figures.

    The sub-index measuring output, which stood at 54.4 just six months ago, fell to 46.5 in April from 48.1 in March. It was the lowest reading since August 2009, more than a year before Ireland was forced to seek an €85 billion bailout.

    Reuters

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