Irish manufacturing firms cut jobs and output at a record rate last month as the sector suffered a marked deterioration, according to a report published today.
The NCB Purchasing Managers' Index (PMI) survey, which measures Irish manufacturing activity, fell for the 15th consecutive month to a new record low of 33.2 in February. Prior to this the index had shown more than 4 years of sustained growth.
Any reading below 50 indicates contraction and the February reading compares to 39.7 for
the previous month. The pace of the monthly decline was the steepest since the data were first collected in 1998, indicating the pressures facing the sector.
"The outlook for Irish exporters was always going to be challenging in 2009 as the UK, US and euro zone all pared back their imports," said Brian Devine, economist at NCB Stockbrokers.
"But the recent woes in Eastern European economies has added to the contraction in Irish export orders," Mr Devine said.
Respondents said a sharp contraction in Eastern European economies had compounded a fall in new orders from Western Europe and the US.
Employment levels in manufacturing companies fell at the fastest rate on record last month due to falling demand, Markit, which compiles the survey, said in a statement. "The principal cause of the latest round of redundancies was lower output requirements".
"Purchasing activity declined at a series record pace," Markit said. "Around 53 per cent of respondents noted lower input buying, against just over 9 per cent, that posted a rise."
The cost of raw materials fell substantially due to a combination of the relative strength of the euro against sterling, pressure on suppliers to reduce prices and a drop in the global price of oil.
Output prices fell at a series record as manufacturers used discounting to try and stimulate demand and respond to greater competition.
