Belfast Telegraph

Pick-up in Britain is boost for local industry

By Clare Weir

Northern Ireland's manufacturers have been given a New Year boost by news that the UK sector is growing once again.

The latest Markit/CIPS purchasing managers' index (PMI) showed a headline reading of 51.4 in December, marking a return to growth for the first time since March and the highest reading since September 2011.

Late last month new figures from the Northern Ireland Statistics and Research Agency showed that manufacturing sales outside Northern Ireland rose in 2012 by 6.1% to £12.9bn.

This included increased sales to Great Britain of 4.3% (£315m) to £7.6bn and increased exports of 8.9% (£427m) to £5.2bn.

The sectors showing the largest increases by value were machinery and equipment (up over 29% including a rise of 15% in exports), electrical equipment (up 15%), and computer, electronic and optical products (up by around 18% in both sales and exports).

The sectors showing the largest declines were paper and paper products and the non-metallic minerals sectors, including concrete, cement and plaster - connected to the collapse of the construction industry.

Bryan Gray, chief executive of trade body, Manufacturing NI, said that the latest figures are very encouraging news for the New Year.

"The increase in home market demand brings greater stability to the sector," he said.

"Coming on the heels of other positive news about the US avoiding the fiscal cliff and the possibility of recession, and the recent huge increase in production in India, the prospect looks increasingly positive for world markets during the next twelve months."

Manufacturers were boosted by increased demand from British firms, which helped output from the sector rise at the fastest pace for 20 months, offsetting an ongoing slump in orders from the crisis-hit eurozone.

The closely-watched survey suggests the manufacturing sector contracted overall in the fourth quarter despite the December recovery, but experts said it raises hopes that manufacturing output has stabilised.

The December reading comes after a difficult year for Britain's manufacturing sector, which has suffered as demand from the UK's main export partner, the eurozone, has been hit by economic troubles.

The average PMI reading in the fourth quarter remained below the no-change level of 50 - which separates expansion from contraction - but higher than that seen in the third quarter and above the average over 2012 as a whole.