1/6/2012: Irish Manufacturing PMI for May 2012

NCB Manufacturing PMIs for Ireland are out for May, so time to update charts.

Per release: "Operating conditions at Irish manufacturing firms improved again in May as output returned to growth and the expansion in new business was sustained. Increased workloads encouraged companies to take on extra staff, and the rate of job creation was solid during the month. Meanwhile, cost inflation remained elevated amid rising prices for fuel and other oil- related products."

Ok, running with numbers:

• Overall Manufacturing PMI has posted a moderate expansion at 51.2 in May up on 50.1 in April 2012. May reading is still within 1/2 stdevs from zero expansion level of 50, but nonetheless, a strong improvement on April. May reading is below 51.5 in March. 
• 12mo MA remains below 50 at 49.4, but 3mo MA is now above 50 at 50.9, compared to previous 3mo MA of 48.9.
• 3mo MA activity remains well below same period 2011 - 54.5 and below same period 2010 - 53.5.
• 6mo MA is about to cross 50, currently at 49.9.

Per chart above and the snapshot below:

• Output index rose to 51 in May from 48.6 in April, with 12mo MA at 50.1 and 3mo MA at 50.8. Previous period 3mo MA was 48.8. Output activity remains subdued compared to same period 3mo MA in 2011 - 56.4 and 2010 - 57.7. 6mo MA is at 49.8, heading for 50.
• Per release: "Higher new orders led firms to raise production during the month. Output increased slightly, following a reduction in the previous month. Production has risen in three of the past four months."
• New orders index moderated the pace of growth in May from 51.4 in April to 51.1. 12mo MA is now at 49.1 and 6mo MA at 49.7. 3mo MA in May stood at 51.7, against previous 47.6 - representing a solid improvement. However, new orders remain subdued compared to same period 3mo MA in 2011 - 56.0 and 2010 - 55.4.
• Per release: "New business at Irish manufacturing firms increased for a fourth successive month in May, with respondents mainly linking growth to higher new export orders."
• New exports orders also moderated the pace of growth in May from 53.1 in April to 52.9. 12mo MA is now at 51.5 and 6mo MA at 52.1. 3mo MA in May stood at 53.7, against previous 50.5 - representing a solid pick up in growth. However, new orders remain subdued compared to same period 3mo MA in 2011 - 59.0 and 2010 - 59.5.
• Per release: "New business from abroad rose at a solid pace as firms were reportedly able to generate sales from outside the eurozone."

Other sub-indices performed reasonably well with no surprises.

Per release: "A depletion of outstanding business also supported output growth in May, with backlogs decreasing at the sharpest pace since January. Manufacturers raised their employment for the

third month running in May amid increased workloads. The pace at which staff were taken on was solid, and the sharpest since March 2011." More on this once Services data is available.

"The rate of inflation of input prices remained sharp in May, and was only slightly slower than that seen in the previous month. According to respondents, the rise mainly reflected higher costs for fuel and other oil-related products. Strong competition largely prevented firms from passing on increased costs to clients, however, and prices charged were reduced fractionally." As usual, I will update profitability conditions changes once we have Services data, so stay tuned.

Overall, Irish Manufacturing is not exactly booming, but is clearly breaking the overall euro area trends. Robust exports exposures are supporting activity and are currently consistent with a shallow expansion in economic activity in Q2 2012.