Ireland: Manufacturers start year on solid footing
February 1, 2017
The Investec Manufacturing Purchasing Managers’ Index (PMI) for Ireland dropped marginally from December’s 17-month high of 55.7 to 55.5 in January. The drop, however, is not considered to be statistically 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 44 consecutive months.
January’s reading was buttressed by another sharp increase in new orders, which rose at their fastest pace since July 2015. The surge in new orders resulted in increased production and higher staffing among Irish manufacturers. Increased production resulted in an accumulation of backlogs of work and contributed to respondents having an optimistic outlook for their businesses over the coming year.
Regarding the latest price developments, chief economist Philip O’Sullivan commented that, “the rate of input cost inflation accelerated sharply during January to the fastest since October 2012. There were a number of factors behind this, including higher commodity prices, the weakness of the euro against the US dollar and price rises at UK suppliers. Some firms were able to pass on at least a portion of these cost pressures by hiking output prices.”