Growth in Irish manufacturing activity accelerated in July as new export orders grew for the first time since February, a survey showed today, in a positive sign for an economy back in recession.
Ireland’s economy unexpectedly shrank late last year and early this year, despite Europe holding up Dublin as an example of austerity policies working as the country prepares to complete an international bailout in 2013.
The Investec Manufacturing Purchasing Managers’ Index rose to 51.0 in July from 50.3 in June, which was the first rise above the 50 line dividing growth from contraction since February.
“After a sluggish start to the year, activity in the Irish manufacturing sector appears to be building momentum in the summer months,” Investec Ireland chief economist Philip O’Sullivan said.
Manufacturing accounts for about a quarter of Irish gross domestic product, according to World Bank figures.
The government is still targeting economic growth of 1.3 percent this year as it tries to cut one of the biggest budget deficits in Europe but the central bank and analysts see slower expansion rates.
The increase in factory activity was underpinned by unusually hot weather in Ireland and stronger demand from Britain as the economy there picks up, O’Sullivan said.
“The key is whether this increased demand can be sustained and replicated across Ireland’s other key trading partners. We would be cautiously optimistic that it will,” he said.
The sub-index measuring orders from abroad jumped to 53.2 in July from 48.0 in June, above the 50 line for the first time in five months. ( C ) Reuters