Sharp rise in manufacturing jobs and orders in Ireland

Among the countries in the European Union, Ireland appears to be leading the way to economic recovery having endured the suffering of the recession years. A strong recovery in the domestic economy and healthy demand from overseas have helped give the manufacturing sector a considerable boost in the final half 2017 in particular.

New orders and employment in the sector rose at their fastest pace as the year drew to a close.

Higher new orders against the backdrop of a booming economy at home, and a strong demand from abroad, helped drive a sharp rise in the number of jobs being created.

But even that wasn’t enough to stop backlogs of work, according to the Purchasing Managers’ Index (PMI) for December.

The pace of growth as the year ended was the strongest since the survey began twenty years ago.

It was a similar picture more widely for manufacturers across the euro zone.

Chief Economist, Philip O’Sullivan, with specialist bank Investec, which publishes the data, said: “It has been impressive for the last couple of years, but in the second half of last year it really gathered steam. Now we have the best reading ever for the two decades that we have been compiling this.”

The expectation is that 2018 bring more of the same.

He added: “The manufacturing sector exited 2017 with a very strong tailwind behind it which is encouraging for the economy here. More than six times as many companies expect growth in 2018, as supposed to the number that anticipate a decline.

In the world economy this year, growth is likely to accelerate to its strongest since before the global financial crisis.”

Companies are also confident that demand will continue into this year — despite the spectre of Brexit. will

The seasonally-adjusted PMI rose to 59.1 in December from 58.1 the previous month. New orders increased at a “substantial” pace last month, with the rate of growth accelerating at the fastest since June 1998.

Those companies which responded to the survey mainly linked the rise to improving client demand.

Meanwhile new export orders also increased sharply, albeit at a reduced pace

The US was said to be a particular bright spot in terms of overseas demand, but other countries in Europe, including the UK, and Asia have also been mentioned by firms.“It’s really just positive demand across (the board),” O’Sullivan said.

Adding: “That’s not particularly surprising given that the world economy is in pretty good shape.

We should see global growth best for seven years in 2018, but that’s only slightly better than the growth rate we would have seen in 2017. And Ireland is extremely leveraged to what happens internationally.”

The typical companies responding to the PMI survey include food manufacturers, paper, chemical, as well as electrical and engineering.

He said there was no one area driving the performance.“It is reasonable to assume that the breadth of the improvement is very wide,” O’Sullivan said. It was similarly positive for manufacturers across the euro zone.

December’s PMI for the bloc, produced by financial information firm Markit, was 60.6, above November’s 60.1. That was the highest since euro zone survey began in 1997.

Meanwhile in the UK, manufacturing growth eased, dropping to 56.3 from 58.2 in November.

With the Irish economy having significantly improved, seven out of every ten jobs lost during the recession years have been recovered, the Department of Finance has claimed. But it has suggested economic growth could slow down in the coming years.

Finance Minister Paschal Donohue said the economy will grow by 3.5pc this year and three per cent the year after, while up to 48,000 jobs will be created.

Speaking about the Department’s Annual Taxation report, Minister Donohue said: “The measure of job growth and progress we are making in job creation is the bedrock on which we are doing everything.“Nearly 2.1 million people are employed in our country, it is heading back to where we were at the peak level.”

As of now, total employment is 12 per cent above the low point of mid2012, the equivalent of 230,000 more jobs than five years ago.

The report predicts Ireland will have been the European Union’s best performing economy for the fourth consecutive year in 2017, after Donohue said growth was likely to beat a forecast of 4.3 per cent back in December.