Manufacturing sector shows record growth in December

The manufacturing sector grew at a record pace in December, as business conditions improved at a record pace, a new survey showed.

The Investec Purchasing Managers' Index, which measures the health of the industry, rose to 59.1 in December, the strongest reading in the history of the series, up from 58.1 in November. The increase was driven by stronger new order growth and the fastest rise in employment in the sector since the survey began in 1998.

The rate of growth in new orders was the fastest since June 1998 as client demand improved, and new export orders also increased sharply. This led to a steep increase in output, with production rising for a 17th month.

“The latest Investec Manufacturing PMI Ireland report shows that the sector exited 2017 with a very strong tailwind behind it,” said Investec’s Philip O’Sullivan.

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Prices

However, input costs rose at their fastest pace in nine months, as prices for raw materials rose.

“Firms were able to defray at least a portion of these cost pressures by hiking output prices, however, this was not enough to prevent a moderation in the rate of growth implied by the Profitability Index,” Mr O’Sullivan said.

Firms were more upbeat about their outlook and potential growth in 2018, as the future output index strengthened. Firms were also confident that the rising workloads seen in the past month would continue in the future.

“With global growth expected to improve to a seven-year high in 2018, we think that firms are right to be confident about their prospects for this year,” Mr O’Sullivan said.