Ireland’s manufacturers on the up and up

It said demand strengthened both at home and abroad, with the increase in new export sales the best seen since March 2010. Manufacturers responded by raising their staffing levels to the greatest degree in 15 years. The seasonally adjusted Investec Purchasing Managers' Index (PMI) – an indicator designed to provide a single-figure measure of the health of the manufacturing industry – improved to a four-month high of 56.9 in December, up from 56.2 in November. The index has now registered above the 50.0 'no-change' mark that separates growth from contraction for 19 months in succession. Supporting the PMI in December were strong gains in output and new orders. Production growth was the best since August, while the rate of increase in new orders was the strongest for three months. There were reports from panellists of improved demand from both at home and abroad. New export orders rose to the greatest degree since March 2010, with companies reporting success in securing new business from Asia, the Middle East and the UK. With output rising at a stronger pace than new work, Irish manufacturers were able to successfully keep on top of workloads. Backlogs of work declined for the fifth month in a row, with the latest reduction the sharpest seen since September. Utilisation of stock was also reported, with inventories of finished goods falling for the first time in three months. Capacity was also increased during December from a labour perspective, as employment levels in the Irish manufacturing sector increased at a substantial pace. The rate of expansion was actually the strongest seen for 15 years as manufacturers also signalled positive expectations for growth. Panellists also sought to support production growth by ensuring they had sufficient stock at their plants. Buying activity was increased at the fastest pace since February 2011, with a proportion of these purchases going directly into stock. Input inventories rose for a fourth month in a row as a result. Suppliers signalled some difficulty in dealing with strong growth of purchasing activity. Insufficient stock meant that vendor delivery times lengthened to the greatest degree in three-and-a-half years. Finally, input price pressures remained modest as a weaker euro against the dollar was countered to a degree by lower global oil prices. Output charges were little changed, up only marginally following four months of deflation.