With Ireland's Services and Manufacturing PMIs out for October, it is time to update the data set. As usual, let us start with headline figures:
- Services PMI reading fell slightly to 61.5 in October from 62.5 in September. 3mo average through October is now at 62.1 which is slightly ahead of 3mo average through July 2014 (61.9). Year on year, 3mo average through October is up 2.6%.
- All of the above a comfortably 'growth signals' for Services sectors.
- Manufacturing PMI strengthened from 55.7 in September to 56.6 in October. 3mo average through October is now 1t 56.5 which is up on 55.2 for the 3mo average through July 2014 and is up 3.3% y/y.
- All of the above suggest strong expansion in Manufacturing, contributing to overall economic growth.
Chart below shows deviations in both indices from 50.0 (so positive readings signal economic activity expansion in the sector).
Next, consider October readings y/y and on 2012 across both sectors:
The above clearly shows that over the last 12-15 months Irish economy has experienced positive contributions to overall economic growth from both sectors: Services and Manufacturing, with the rates of growth now significantly in excess of historical averages and being led more by Manufacturing than Services ('Current" reading is firmly above the trend line). This can be a positive signal when it comes to employment expectations, assuming growth is concentrated more in the sectors relatively free from rampant tax optimisation by the MNCs (aka outside pharma).