Irish manufacturing strengthens further

Solid growth of output and new orders was recorded and firms reacted to increased workloads by raising employment at the fastest pace since December 1999. The rate of input cost inflation remained only slight during the month and firms reduced their output prices again in response to strong competition. The PMI was 55.0 in May, down from April's reading of 56.1, but still signalling a sharp monthly improvement in business conditions in the sector. Operating conditions have now strengthened throughout the past year. Manufacturing output increased for the 12th month running in May, with the rate of expansion remaining sharp despite slowing from that seen in April. According to respondents, higher sales had been the main factor leading production to increase. New orders increased at a solid pace, helped by the launch of new products. The rate of growth in new export business picked up to the strongest since last October, with the UK highlighted as a key source of new orders. Firms responded by taking on extra staff for the 12th month running. Moreover, the rate of job creation quickened to the strongest since December 1999 and was one of the fastest in the history of the series which began in May 1998. Philip O'Sullivan, chief economist at Investec Ireland, said: "The economic improvement across Ireland's key trading partners is supportive for many of the manufacturing firms based here... "UK GDP expanded for a fifth successive quarter in Q1 2014 (+0.8% q/q), with the economy of Ireland's largest trading partner now just 0.6% below its 2008 peak."