Ireland: Manufacturing industries grow at faster pace in April
June 5, 2019
Ireland’s manufacturing sector lost more momentum in May and expanded at the weakest pace since the aftermath of the UK’s EU referendum vote in July 2016, driven by an unwinding of the Brexit-stockpiling boost to the manufacturing sector. The AIB manufacturing Purchasing Managers’ Index (PMI) fell to 50.4 from 52.5 in April, thus moving closer to the critical 50-point threshold that separates expansion from contraction in activity. May’s reading once again outperformed the manufacturing PMIs of leading Eurozone peers and came in well above the 47.7 registered for the bloc.
A downturn in demand conditions caused output to shrink for the first time since the Brexit vote and new business to contract at the swiftest rate in six years. Exports sales also fell, although did so at a marginal pace. As a result, backlogs of work fell sharply in the month. A fall in customer orders led to firms making an effort to reduce their stocks of finished goods. Meanwhile, manufacturers continued to hire more workers, although the rate of job creation was modest. On the price front, input prices climbed, but did so at the slowest pace in almost three years amid lower prices for natural gas and resin; manufactures raised output prices in response. Meanwhile, business sentiment strengthened on an improved outlook on production.FocusEconomics Consensus Forecast panelists expect industrial production to grow 2.2% in 2019, which is down 0.4 percentage points from last month’s forecast. For 2020, the panel sees industrial production growth rising to 2.7%.
Author: Nihad Ahmed, Economist