Ireland: Irish manufacturing PMI drops but still points to ongoing strength in February
March 1, 2017
The Investec Manufacturing Purchasing Managers’ Index (PMI) dropped from January’s 55.5 to 53.8 in February. However, the drop is not considered to be significant since the monthly print points to another sharp increase in activity in the Irish manufacturing sector. The indicator remains above the 50-threshold that separates expansion from contraction in the manufacturing sector, where it has been for 45 consecutive months.
February’s reading came on the back of a sharp growth in new business and new orders, the latter of which expanded for the seventh consecutive month and at a faster pace than the series average. The strong rise in new orders resulted in higher production and employment. Despite higher staffing, the accumulation of backlogs of work increased in the surveyed month. Assessing the outlook for production capabilities, survey respondents remained optimistic owing to expectations of better economic conditions and rising new orders. Regarding price developments, input prices rose markedly while output prices rose at a softer pace than in January.
Regarding the latest outlook reading among Irish manufacturers, chief economist Philip O’Sullivan commented that, “Irish manufacturers remain upbeat on the outlook, with more than 15 times as many firms expecting to see output maintained or increased over the coming 12 months as against those who anticipate a decrease. […] It is also clear that most firms expect to be able to overcome this and record further growth over the coming year.”