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Irish man. growth up again in Feb.

Friday, March 01 07:31:10

Growth in Irish manufacturing activity recovered in February from a nine-month low, extending the expansion in the sector to 12 months even as most of the euro zone continues to contract, a survey showed today.

Ireland is confident of exiting its EU/IMF bailout on schedule at the end of 2013. Its economy returned to growth in 2011, while the slump seen elsewhere in the euro zone likely saw the export-led expansion slow to just 0.9 percent last year.

In February, the NCB Manufacturing Purchasing Managers' Index rose to 51.5 from 50.3 in January, back to the level of growth seen at the end of last year, and well above the 50 line that divides expansion from contraction.

Manufacturing contributes around one quarter of Ireland's gross domestic product, according to World Bank figures.

The growth in manufacturing in Ireland stands in stark contrast to the contraction in factory activity for the euro zone as a whole, as seen in flash PMI data released in mid-February.

February's rise was driven by a return to growth in new orders, which had slipped into negative territory for the first time in a year in January, while new export orders also climbed, albeit marginally, for a fifth successive month.

The positive momentum also filtered through to the number of new jobs in the sector, with the subindex measuring employment rising to 52.7 from 49.6 in January, when it contacted for the first time in 11 months.

"Encouragingly, the improvement was partly attributed to expectations of higher production requirements over the coming months," Philip O'Sullivan, chief economist at NCB Stockbrokers, said of the bump in employment.

"In all, with the headline PMI reading pointing to a 12th successive month of growth for the Irish manufacturing sector, and the rate of expansion improving from the 9-month low in January, this is a solid outturn."

Data released this week showed that Ireland's unemployment rate fell to 14.2 percent in the fourth quarter of last year, a more than two-year low, nurturing hopes that the struggling domestic economy may soon begin to recover.

Ireland's plans for reducing a government debt set to peak above 120 percent of gross domestic product this year depend on the domestic side of the economy improving from next year and GDP growth accelerating to above 2 percent in 2015. ( C) Reuters