Weak euro continues to aid Irish manufacturing sector
The country’s manufacturing sector expanded rapidly again last month with the weakness of the euro continuing to benefit the competitiveness of exporters to the UK, in particular.
New product ranges, rolled out at the beginning of the year, are also starting to drive improvements in manufacturers’ output as the headline purchasing managers’ index (PMI) figure reached 56.8.
Despite a slight decline from the 15-year high of 57.5 in February, the rate of expansion in the sector remains encouragingly strong, according to Investec Ireland chief economist, Philip O’Sullivan.
“Irish manufacturing employment has been on the increase for almost two years now in response to improving client demand, with March seeing the strongest rate of increase in job creation since the survey began in May 1998 — clearly, a very welcome development… We now have a complete picture on how the Irish manufacturing sector performed during Q1 and the results are very encouraging”.
Mr O’Sullivan sounded a note of caution ahead of the British general election on May 7, however.
“Any uncertainty ahead of next month’s UK election, particularly if it impacts the currency markets, would be unhelpful. To that end, we would encourage Irish manufacturing firms to consider strategies to protect themselves against any near-term volatility.”
Output prices fell for a third successive month, with the pace of reduction quickening slightly from February as some firms,particularly in the food sector, passed on recent declines in input prices to customers
Overall, input prices rose, though with the weak euro working against those importing raw materials.
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