Ireland PMI July 2017


Ireland: Irish Manufacturing PMI drops in July

August 1, 2017

The Investec Manufacturing Purchasing Managers’ Index (PMI) edged down from June’s almost two-year high of 56.0 to 54.6 in July. Despite the drop, the indicator remains above the 50-threshold that separates expansion from contraction in the manufacturing sector, where it has been for over the past four years.

July’s print reflects a sharp increase in new orders and output. The increase in new orders was buttressed by increased demand from new and existing clients. In turn, new orders supported an increase in manufacturing output for the twelfth consecutive month. Higher new orders resulted in an accumulation of backlogs of work and firms increased staffing to meet higher production requirements. Regarding price developments, input costs rose albeit at the softest pace this year and output prices increased as manufacturers passed on higher costs to consumers.

Assessing the latest one-year outlook reading among Irish manufacturers, Chief Economist Philip O’Sullivan commented that, “looking forward, manufacturers remained positive on the outlook with this optimism linked to expectations of further growth in both domestic and international orders. […] Following a strong performance by the manufacturing sector in H1 this year, and the generally improving global backdrop, we also remain upbeat about prospects for the sector over the remainder of the year.”

FocusEconomics Consensus Forecast panelists expect investment to expand 7.8% in 2017, which is unchanged from last month’s forecast. For 2018, the panel sees investment rising 3.5%.

Author: Jean-Philippe Pourcelot, Economist

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Ireland PMI Chart

Ireland Manufacturing PMI July 2017 1

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

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