Well here’s some good news from Reuters – Ireland has been the only Euro Zone country not to see a decline in manufacturing activity in October.
This report is based on the NCB purchasing manager index which showed that the Irish Manufacturing sector saw a marginal increase in production last month. This is the first increase that the sector saw in five months, and the report is based on an increase in new orders from export markets.
This puts Ireland in stark contrast to other Euro Zone countries where the decline in manufacturing has proved to be worse than previously thought. The Eurozone Purchasing Managers’ Index has seen a decline from a figure of forty eight point five in September to a figure of forty seven point one for October. This is indicative of the relentless slide towards recession that Europe seems to be suffering.
Meanwhile, the Purchasing Managers’ Index in Ireland has managed to remain above the fifty mark for the third month running – to ride above fifty indicates that an economy is in growth which to dip below it indicates economic contraction. By comparison, the wider Eurozone has seen the Purchasing Managers’ Index stubbornly remain below the fifty mark, with a figure for factory output declining from forty nine point six to forty six point six for October.
The contraction extends even to Germany, and that news along with a threat to France’s credit rating, is singularly ominous for the ‘Euro Experiment’. Add to that a sudden increase in unemployment in Germany, and the one certainty is that we live in ‘interesting’ times. It is actually a Chinese curse to say: may you live in interesting times!
In the past, Ireland managed to sit out the European dark ages – a little ‘keeper of the light’ on the periphery – but even with these instances of good news, Ireland will find it hard not to be affected by the upheavals that are convulsing the European mainland, or more specifically the Eurozone. An essential requirement for an export led recovery is to have a thriving export market. It won’t be only our Euro export markets; there is the potential here for a crises that can ripple out to The UK, America and beyond.