Ireland PMI January 2016


Manufacturing PMI inches up in January

The Investec Manufacturing Purchasing Managers’ Index (PMI) inched up from 54.2 in December to 54.3 in January. The PMI remains comfortably above the 50-threshold that indicates expansion in the manufacturing sector where it has been for 32 consecutive months.

January’s result mainly reflected a strong rise in new orders, which increased for the 31st consecutive month and marked strongest expansion since July 2015. Likewise, new export business also grew sharply in January. As new orders rose, Irish manufacturers continued to take on extra staff in January and increased firms’ production capacity in order to work through outstanding business. Subdued commodities prices led to the biggest drop in input costs in three month, which resulted in output charges decreasing for the first time since October.

According to the survey report, “a key highlight of today’s report is the New Orders component, which reveals a sharp and accelerated expansion, extending the current run of positive readings to 31 months. We are also encouraged to see that the rate of growth in New Export Orders improved to a six month high, notwithstanding some of the unhelpful moves we’ve seen in the currency markets in recent weeks.”

According to its first Quarterly Bulletin of 2016, the Central Bank expects GDP to grow 4.8% in 2016 and 4.4% in 2017. FocusEconomics Consensus Forecast panelists expect the economy to grow 4.6% in 2016, which is up 0.1 percentage points from last month’s forecast. For 2017, the panel sees economic growth moderating to 3.9%.

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Ireland PMI Chart

Ireland Manufacturing PMI December 2015 0

Note: Markit Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 point to a contraction.
Source: Markit.

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