Last Updated: 03/03/2008  09:19

Manufacturing edges towards growth

Ireland's manufacturing sector contracted in February for the third month in a row, but the pace was less marked than in January.

The seasonally adjusted NCB Purchasing Managers' Index (PMI), measuring activity in manufacturing, rose to 49.8 last month from 46.4 in January when the survey sank to its lowest level since July 2003.

It was the first improvement in the PMI since September but the third month in a row that the reading has been below the 50 mark that separates growth from contraction after over four years of uninterrupted expansion.

"While overall it was still below 50, orders picked up, especially export orders and employment, though still slowing, was much improved from the January reading," said Eunan King, senior economist with NCB Stockbrokers.

The output component of the index indicated a return to growth, increasing to 50.8 from 46.0 in January, helped by a pick-up in new orders to 50.2 from 46.4.

New export orders grew for the ninth month in a row with the rate of expansion improving to 52.5 from 50.4.

The employment sub-index also showed a marked improvement, but at 48.3 versus 42.5 in January indicated that manufacturers were still shedding staff.

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