Growth in manufacturing slows

Irish manufacturing firms continued to expand in July, but the rebound continued to lose momentum as growth slowed for the third month in a row.

The NCB Purchasing Managers Index

headline composite index fell to 51.4 from 51.8, the weakest in five months as new orders and employment continued to show weakness. Employment fell to 48.8 last month, below the 50 mark that separates expansion from contraction.

"The fall off in employment after a brief foray into positive territory is unsurprising," NCB said.

New orders, meanwhile, were just above this mark, at 50.7, fuelled by exports. The new export order index was 54.1, increasing solidly during the month, the ninth consecutive month that the index has grown.

"The principal cause of the latest expansion was strengthening global demand, with some panellists mentioning higher new orders from the UK in particular," the report said.

Backlogs of work fell for the fourth month in a row, and a rise in the cost of raw materials forced a sharp increase in input costs during the month. Pressure from customers caused Irish manufacturers to reduce output charges for the first time since April, although the decrease was marginal.