Growth of manufacturing output in Ireland rebounded from March’s weather-related slowdown during April, helping lead to a stronger improvement in business conditions.
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On a less positive note, the rate of expansion in new orders eased for the fourth month running.
Meanwhile, both input costs and output prices rose at sharper rates at the start of the second quarter.
The seasonally adjusted Investec Purchasing Managers’ Index (PMI) – an indicator designed to provide a single-figure measure of the health of the manufacturing industry – rose to 55.3 in April from 54.1 in March, thereby signalling a marked and accelerated monthly improvement in the health of the sector.
Business conditions have now strengthened in each of the past 59 months.
After production lines had been impacted by snow disruption in March, the rate of expansion in manufacturing output picked up markedly in April and was sharp.
As well as improved weather conditions, panellists also linked production growth to higher new orders.
Although new orders continued to rise in April, the rate of expansion slowed for the fourth month in a row to the slowest since November 2016.
The rate of expansion in new business from abroad also eased and was the weakest for a year-and-a-half.
With production lines back up and running, the rate of backlog accumulation was much slower in April.
Outstanding business was up only marginally over the month.
Meanwhile, firms continued to use inventories to help fulfil orders, resulting in a second successive monthly fall in stocks of finished goods.
The rate of job creation eased further from December’s record, but remained sharp as manufacturers took on extra staff to support growth of output.
Employment has now risen in 19 successive months.
Inflationary pressures strengthened in April, with both input costs and output prices rising at faster rates than in March.
Where input prices increased, panellists mentioned higher costs for raw materials such as paper, steel and timber.
The passing on of these higher cost burdens to customers led to a further marked increase in selling prices, and one that was the fastest for a year.
The rate of growth in purchasing accelerated to the fastest in 2018 so far as firms responded to rising new orders.
Strong increases in input buying fed through to an increase in stocks of purchases, and at the joint-fastest pace since November 2014.
Rising demand for inputs and raw material shortages led to a marked lengthening of suppliers’ delivery times.
The deterioration in vendor performance was one of the strongest in the survey’s history.
Firms generally expect output to rise over the coming year, with optimism linked to predictions of improving market conditions and new product launches.