Ireland Sees Fastest Rise in Manufacturing New Orders Since April 2011
Business conditions in Ireland continued to improve during July, partly due to accelerated growth of new orders.
Both output and employment also expanded again during the month. The recent drop off in price pressures continued as input costs decreased for the second month running.
Manufacturing output rose solidly again in July, extending the current sequence of growth to three months. Higher new orders was reportedly the main reason for the latest increase in production, with rising new export business highlighted in particular by respondents.
New orders from abroad increased substantially, with the rate of expansion the sharpest since May 2011. Anecdotal evidence suggested that nonEuropean markets had been a particular source of growth. Total new orders also rose at a faster pace in July, with the latest increase the steepest in 15 months.
Growth of sales was partly behind the latest reduction in stocks of finished goods. Postproduction inventories fell solidly, and at the fastest pace in three months.
Increased production contributed to a fall in backlogs of work, as outstanding business decreased in spite of new order growth. Meanwhile,
employment increased at a solid pace amid rising output requirements.
Higher production requirements also encouraged firms to raise their input buying during July. Purchasing activity increased markedly, and at the
sharpest pace since April 2011. Rising input buying led to a first increase in pre-production inventories in 56 months.
Panellists reported that stronger demand for inputs had led to a deterioration in supplier performance during the month. Lead times lengthened for the first time since April, albeit only modestly.
Input prices decreased for the second month running in July. According to respondents, lower commodity prices was the main factor behind the fall, which was the strongest since November 2009.
Firms were able to pass on lower input costs to clients over the month, while strong competition also contributed to a solid fall in prices charged. The reduction in output prices followed no change in the previous month.