Manufacturing growth rises to 22-month high – PMI

Manufacturing posted its fastest growth in almost two years in May as employment surged, a survey showed today.

The survey is the latest sign the economy is weathering the early effects from the UK’s Brexit vote.

Investec’s Manufacturing Purchasing Managers’ index rose to a 22-month high of 55.9 in May from 55 in April – its highest level since July 2015 – and remaining above the 50 mark separating growth from contraction.

Ireland, the EU’s fastest-growing economy, is widely seen as the member most at risk from Brexit because of its close trading links with Britain.

But after the muted impact so far, the country’s economic forecasts for economic growth for 2017 and 2018 were raised in April.

Today’s index showed that new orders in manufacturing reached a three-month high, with twice as many respondents reporting increases in new orders as decreases.

The growth rate for new export orders eased slightly, but remained strong and above the series average.

Employment growth rose to its fastest pace in two years with a number of respondents saying they had taken on new staff on expectations of further workload increases.

Investec Ireland’s chief economist Philip O’Sullivan said the economy appeared to be enjoying the benefit of an improving international backdrop, with his bank forecasting the world economy will grow 3.9% next year, its highest growth rate since 2011.

“Given such a supportive profile, we would anticipate further strong (Irish) manufacturing PMI readings over the coming quarters,” he said.