Expansion in Ireland's manufacturing sector slowed last month as production grew less strongly and new export orders fell for a third month, according to a survey published today.
The seasonally adjusted Purchasing Managers' Index (PMI), an indicator which measures activity in manufacturing, fell from 51.3 in April to 50.3 in May, still keeping above the 50.0 mark separating growth from contraction.
The latest PMI reading, compiled in a survey by NTC Research, was the lowest in the current 21 month period of expansion.
"Levels of incoming new business to Irish manufacturers rose modestly in May, at a rate broadly unchanged from the previous month," NTC said.
Manufacturers reported that the introduction of new products and increased levels of marketing helped to sustain new business growth but the rise in total new work reflected improved domestic demand only.
Manufacturing production rose again in May, but the rate of growth was modest and weaker than in April. Panellists linked the rise in output to increased new orders.
New export orders declined for the third successive month and at the sharpest rate since August 2003. Panellists attributed the drop in new foreign work to fewer new orders from their clients based in the euro zone.
Staffing levels in the Irish manufacturing sector declined in May for the first time in 16 months, although only slightly.
"A number of firms mentioned that the weaker trend in new orders had made them reluctant to take on new staff in the latest survey period," the survey said.
Another sharp rise in average costs facing Irish manufacturers was shown in May's survey. Panellists attributed this to higher prices for a range of raw materials, particularly metals, and increased fuel and energy costs.
However, the rate of input price inflation eased slightly to a 15 month low.