Ireland's manufacturing expands in November

City A.M. Reporter
IRELAND'S manufacturing sector expanded for the second month in a row in November with the rate of growth picking up slightly as exports helped drive stronger output and new orders, a survey showed today.

The NCB Purchasing Managers' Index, which measures Irish manufacturing activity, rose to 51.2 from 50.9 in October, above the 50 mark separating growth from contraction for the second month in a row and at the highest level since July.

Ireland's manufacturing industry and the wider economy is relying on exports, in particular the output of multinationals such as chipmaker Intel, to pull the country out of a prolonged recession.

Domestic demand is set to remain subdued given high unemployment and an aggressive series of austerity budgets planned over the next four years following an €85b (£71.5bn) EU/IMF bailout announced on Sunday.

"Fiscal and banking issues rightly continue to be the focus in Ireland, but the underlying economy, especially those areas directly involved in exporting are still alive and kicking," said Brian Devine, economist at NCB Stockbrokers.

The output and new order components of the PMI edged up in November from a month earlier while the reading for export orders stood at 54.7, a fraction below the 54.9 recorded in October.

Irish businesses are cutting back, in particular wages and jobs, to improve competitiveness after years of spiralling prices during the "Celtic Tiger" economic boom.

The picture for employment remained negative, dropping slightly month-on-month although it remained the third-strongest reading in three years.