Manufacturing output figures for May paint a picture of a continued decline in the sector.
Figures released by the Central Statistics Office (CSO) show that output in the first five months of the year was 4 per cent lower than in the same period in 2012, which Merrion Stockbrokers said painted a "dark picture as far as Ireland's manufacturing sector is concerned".
In the period from March to May, output decreased by 2.1 per cent on the preceding three months.
Production in May was 8 per cent lower than in the same month last year and there was a year-on-year revised decrease of 2.7 per cent posted in April, the CSO said.
The “modern” production sector reported a monthly drop of 2.5 per cent for the month of May and, for the overall year, has dropped by 10.3 per cent following a revised annual fall of 1.5 per cent in April.
Pharmaceuticals, notably, were down in both monthly and annual comparisons for the year to May, mainly a reflection of patent expirations on certain products. There was also weaker global demand.
The “traditional”, or indigenous sector, decreased by 4.2 per cent in the month and 4.1 per cent in the year, the fifth annual fall in the last six months. One of the reasons for this is believed to be the general weakness in the UK economy and the depreciation of the pound.
According to Merrion, because of uncertain global economic conditions, particularly in the euro zone and UK, there are concerns that overall production will remain subdued in the immediate future.
This reality, says economist Alan McQuaid, “doesn’t augur well for the prospects of Irish merchandise exports, an integral part of the country’s economic recovery hopes.
“The latest manufacturing PMI data, released earlier this week, showed that the sector moved back into expansionary territory in June though the sub-index measuring orders from abroad fell to its second-lowest reading since Ireland’s economic crisis took hold in 2009.”
Manufacturing accounts for about a quarter of Ireland’s GDP, although with weakened demand from abroad hitting goods exports particularly hard, there is now an increasingly reliance on the services industry.
