IRELAND’S MANUFACTURING sector deteriorated at a marginally slower rate in February, with further growth in new export orders reflecting the gap between low domestic demand and a pick-up in global activity.
The NCB Purchasing Managers’ Index (PMI), which measures Irish manufacturing activity, rose to 48.6, back towards the 50 mark separating growth from contraction, after falling to 48.1 in January, largely due to unusually cold weather.
“It is much the same story as in previous months,” Brian Devine, economist at NCB Stockbrokers, said. “Domestic demand and employment remain weak while new export orders continue to accelerate past the 50 mark, reflecting the pick-up in global activity.”
While Ireland technically pulled out of recession in the third quarter of 2009 based on quarterly gross domestic product data published in December, the economy has remained very weak with its more relevant measure of gross national product continuing to fall.
New export orders, which stayed above the level separating growth from decline for a fourth consecutive month, accelerated to 56.8 in February from 53.5 a month earlier to reach its highest mark since May 2006.
Almost all of the other sub-indices continued to show contraction, with manufacturing output, which enjoyed a brief spell of growth in November, coming closest to a return above the 50 mark.
In the broader euro zone, manufacturing activity grew slightly faster than previously thought last month but Spain continued to lag far behind the bloc’s other big economies.
The Markit Eurozone Manufacturing PMI for February jumped to 54.2 from 52.4 in January.
This is the fifth consecutive month the index has been above the 50 mark that divides growth from contraction and is its highest reading since August 2007.
Earlier data from Germany, the 16-nation bloc’s biggest economy, showed activity there expanded at its fastest pace in 32 months, while in Italy the PMI was just shy of January’s 28-month high. France’s PMI slipped to 54.9.
In Spain, manufacturing activity contracted for the 27th month, although it was closer to stabilising.
Spain’s PMI jumped to 49.1 from January’s 45.3. – (Reuters)
