Irish manufacturing shrank in May at the slowest pace since October, with early signs that improving export demand could induce a recovery in the sector in coming months, a survey showed today.
The seasonally adjusted NCB Purchasing Managers' Index (PMI) which measures Irish manufacturing activity rose to 39.4 in May from 36.1 April, still below the 50 mark separating growth from contraction. It was last above 50 in November 2007.
Ireland's economy is expected to contract by a record rate of about 8 per cent this year but NCB said there was a source for some optimism in the new export orders PMI component reaching its highest level since September at 43.4 in May.
"We will watch this carefully for signs that Ireland and its manufacturing sector are being dragged up by an upturn in economic activity with our main trading partners expected to return to growth by the end of the year," said Brian Devine, economist at NCB Stockbrokers.
"With the domestic economy so weak, look for the new export orders component of the PMI to breach the 50 mark before the headline PMI will follow suit," Mr Devine added.
Output decreased for the 15th consecutive month but the pace of reduction eased for the third month in a row to its slowest since October 2008, said Markit which compiles the data.
Employment kept falling sharply.
"However, the rate of job shedding eased to its slowest since November 2008," Markit said.
Reuters