Here are the updated charts and my commentary:
Strong drivers for PMIs in Manufacturing in January 2011 were:
- New orders (up to 58.8 in January 2011 against 53.2 in December 2010 and 12-mo average of 52.5), driven by New Export Orders (up to 60.3 in January 2011 against 54 in December 2010 and 12-mo average of 56.1).
Backlogs and inventories:
Again, good performance with all signlas going in the right direction here.
Employment index is now for the second month running showing expansion, which is good news. Bad news - employment index is still relatively weak. But this is the first two-months consecutive expansion signal we had since October-November 2007.
Worrisome trend is on output-input prices gap, which is showing significant inputs price pressures.
Let's take a look at employment figures a bit closer:
You can see the divergence between services and manufacturing PMIs in both core PMIs and employment index.
So mapping the recovery:
Right move, in right direction for manufacturing. Let's hope services surprise on the positive side as well...
It is worth remembering that:
- Manufacturing sector in Ireland is heavily exports-oriented and as such is less labour-intensive than more domestically-oriented manufacturing in, say, France
- Manufacturing in Ireland is less labour-intensive than services (which, per December - the latest data due for an update in the next few days - is still tanking)
- Net effect of manufacturing growth - on employment is negligible, but still great news!