Ireland: Manufacturing PMI improves in September
The AIB Manufacturing Purchasing Managers’ Index (PMI) came in at 51.5 in September, up from August’s 51.1. As such, the index moved further above the 50.0 no-change threshold, signaling a faster improvement in manufacturing sector operating conditions compared to the previous month. That said, the rate of growth was the second-weakest since October 2020 and remained below the long-run average of 52.3.
The PMI rose in September as firms continued to clear backlogs, leading to output falling less sharply than it did last month. In addition, employment growth rose to a three-month high. Less positively, new orders fell at the fastest rate since January 2021, at which point Ireland was embroiled in its third Covid-19 wave; input purchases also fell as a result. Demand was depressed by the growing prospect of an economic slowdown at home and abroad, as well as by high prices. Although input inflation fell to a 19-month low, output inflation remained little-changed from August and remained higher than in any month prior to July 2021. These headwinds fed in to a glum outlook for production ahead: Business sentiment remained near a two-year low despite improving slightly, while the ratio of new orders to inventories fell to its lowest level since May 2020.