Irish PMI Survey Shows Contraction In Manufacturing Base

by Jason Gorringe, Tax-News.com, London

02 May 2003

Ireland's manufacturing base continues to show signs of contraction, according to the latest PMI (Purchasing Managers' Index) figures released this week.

Although the index rose from 47.4 in March to 48.2 last month, any figure under 50 represents a negative, and indicates shrinkage in the manufacturing sector. It is the seventh month in a row that the figure has showed a decline in manufacturing.

Other indicators released recently also pointed to a general malaise of the economy, with employment levels declining for the eighth month in a row. However, the employment index revealed that the rate of the decline in employment was slowing with a figure of 47.5, up from 46.1 last month.

Depressing trade figures did little to lift the gloom. The decline in both domestic and foreign orders appears to have accelerated, and foreign orders are at their lowest level since 2001, according to figures released by NCB, which also compiles the Purchasing Managers' Index. This has been attributed to the rising value of the euro against the dollar, adversely affecting orders from the US.

Inflation levels were slightly more optimistic however, with the index falling slightly to 54.7, and most firms reported moderation in their cost bases.

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