There were new indications that the Irish economy is stabilising, as manufacturing output showed an increase in November for the first time in more than a year and a half.
According to NCB Stockbrokers, the output increase was driven by new order growth, which rose for the first time in 21 months. New export orders increased at a faster pace than overall new business.
However, operating conditions are still deteriorating. The NCB Purchasing Managers' Index (PMI), which measures Irish manufacturing activity, rose slightly in November to from 48.0 to 48.8, edging closer to the 50 mark that separates growth from contraction.
"While the headline PMI, a composite figure, did not breach the 50 mark both output and new orders expanded in November for the first time since February 2008," said Brian Devine, economist at NCB Stockbrokers.
"Increased demand, particularly from abroad, drove new orders higher on the month. The latest output readings are encouraging and corroborate what a number of other indicators have been showing; the Irish economy is stabilising and forming a base from which to grow."
Employment in the sector continued to fall however, but at the slowest rate for a year and a half. This indicated excess capacity in the sector, NCB said.
The report said fragile demand helped firms successfully negotiate input price reductions with suppliers, leading to a 13th month of input price declines. The reduction was at a sharper pace than the previous month.
Output prices also saw a decline, as companies offered discounts spurred on by intense competition and scarce demand. The report said Irish manufacturers had reduced purchasing activity in an attempt to deplete inventories.
