Ireland: Industrial activity contracts at sharpest rate since October 2021 in July
Industrial production collapsed 18.9% month-on-month in seasonally-adjusted terms in July (June: +11.2% mom). July’s outturn marked the worst reading since October 2021. The reading was largely driven by a deterioration in modern sector output. In contrast, traditional sector output rebounded.
On an annual basis, overall industrial production plunged 22.1% in July (June: +14.4% yoy). Accordingly, the trend pointed down, with the annual average variation of industrial production coming in at minus 8.5%, down from June’s minus 4.5%.
The print mirrors the over one-year low in the Manufacturing PMI seen in July. Demand was likely depressed by inflation hitting a 38-year high in July. With inflation set to remain elevated in what remains of this year, and interest rates in OECD countries rising, it seems likely that demand and thus industrial output will remain subdued on average in the months ahead.