DUBLIN, Nov 2 (Reuters) - Ireland's manufacturing sector edged closer to recovery in October, raising the prospect of the whole economy starting to come out of recession as early as the last quarter of 2009, a survey showed on Monday.
The NCB Purchasing Managers' Index (PMI), which measures Irish manufacturing activity, rose to 48.0 from 46.6 in September, reaching the highest level since February 2008 and approaching the 50 mark that separates growth from contraction. "With global economic activity gathering momentum we are still hopeful that the Irish economy will begin growing in fourth quarter of this year and the latest PMI was comforting in this regard," said Brian Devine, economist at NCB Stockbrokers.
Ireland is expected to suffer one of the deepest contractions in the Western world in the whole of 2009 but an increasing number of analysts are beginning to project an exit from recession during next year and a return to annual growth in 2011.
New orders were almost back at the level separating growth from decline, registering their best performance since the sub-index was last above the 50.0 mark in February last year.
Despite the improving overall trend, the sub-index measuring new export orders in manufacturing declined in October to an adjusted 49.2 from 50.6 in September, which Devine attributed to the weakness of sterling versus the euro.
"With UK exports under pressure it is a welcome sign that the U.S. economy posted impressive GDP growth in the third quarter," he said.
In another cautiously upbeat release, the Irish Business and Employers Confederation (IBEC) said on Friday Ireland would pull out of recession during 2010 when it will suffer a smaller contraction over the whole year than earlier feared. (Reporting by Andras Gergely; editing by Stephen Nisbet)