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Irish firms’ factory output rebounds in July

Irish manufacturing sector growth bounced back from a 16-month low in July as the weak euro boosted exports, a new survey has shown.

The Investec Manufacturing Purchasing Managers’ Index rose to 56.7 in July from 54.6 in June. But it remained below the 15-year high of 57.5 posted in February.

The index has held above the 50 line denoting growth since May 2013, when Ireland was in an international bailout programme.

Ireland was the fastest-growing economy in the European Union last year, with gross domestic product increasing 5.2pc.

“The strengthening of output, new orders and employment in July gives confidence to our view that activity levels for Irish manufacturing firms are likely to pick up again in Q3 after a slower finish to Q2,” said Investec chief economist Philip O’Sullivan.
“The single currency’s continued weakness against both the dollar and sterling augurs well for exports to the US and UK, two critical markets for Irish exporters,” he said.

Mr O’Sullivan also said that respondents took extra staff due to greater production requirements and anticipated growth in new orders.
The PMI survey showed that employment at Irish manufacturing firms rose faster during July compared to June, extending the current sequence of job creation to 26 months.

Input prices and new export orders also increased, both put down partially to the weak euro while output prices declined.

The increase in Ireland’s PMI reading came the day after Eurozone manufacturing showed a collapse in Greece’s manufacturing output in July.

According to financial services company Markit, the manufacturing sector continued to expand at a steady pace across the Eurozone with the PMI at 52.4 for July, above the earlier estimates of 52.2 and close to June’s 14-month peak.

However, Greek manufacturing activity plunged to an all-time low.

The PMI reading of 30.2 was substantially worse than its previous record low of 37.7 which was recorded in February 2012.

Production, employment and purchasing activity all suffered sharp slumps, dropping at the fastest rates on records since Markit began compiling the data 16 years ago.

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