Manufacturing costs hit hard by higher prices, oil

Higher oil and raw material prices drove up manufacturing costs last month, the latest figures show.

Higher oil and raw material prices drove up manufacturing costs last month, the latest figures show.

The NCB Purchasing Managers' Index for November shows manufacturers experienced their highest cost increased for oil and raw materials for nine months.

The input prices index, which measures energy and materials costs, ended the month at 65.1.

Any measurement above 50 signals an increase in costs or growth on the month before, while a result below that benchmark figure indicates a fall.

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The higher input costs contributed to inflation, as manufacturers passed on the price rises to their customers.

Output prices, that is the amounts charged for manufactured goods, also rose, hitting 55.6, the figures show. NCB said yesterday that manufacturing firms faced a "substantial increase in input costs in November" as oil and raw material prices rose.

"Higher costs underpinned a robust rate of output price inflation at Irish manufacturing firms," NCB said.

"Prices charged rose for the 50th month running and at a sharper rate than the average for the current inflationary period."

Overall, NCB said Irish manufacturers' economic health improved moderately in November, with activity remaining above the critical 50, no change mark for the 51st consecutive month. The total index hit 52.3, a rate of growth that matched that in October.

The figures also show that manufacturers continued to hire new people during the month, particularly to deal with new business and product lines.

However, the 51.7 employment index indicated that jobs growth slowed from its October high, when it reached 51.9.

New order volumes also increased, but at a slower rate than earlier in the year, hitting 52.1, far below the stronger growth recorded five months before, when it hit 56.4.

"Anecdotal evidence suggested that an improvement in underlying demand had led to higher new work, although the rate of expansion slowed to an eight-month low," NCB said. "New work from abroad rose at a moderate pace in November."

PMI figures for the euro zone as a whole, meanwhile, showed that factory output growth increased in November from October's 26-month low.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas