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Ireland PMI September 2020

Ireland: Manufacturing conditions stagnate in September

The AIB manufacturing Purchasing Managers’ Index (PMI) dropped from August’s 52.3 to 50.0 in September. As a result, the index landed on the 50-threshold, indicating that operating conditions in the manufacturing sector remained unchanged over the previous month, and marking the end of a three-month recovery.

September’s reading largely reflected contractions in output, new orders and employment being offset by a significant lengthening in suppliers’ delivery times owing to shortages and transport difficulties due to the health crisis. Moreover, export orders declined for the first time since May as elevated uncertainty amid the pandemic and ongoing Brexit negotiations hampered demand. This prompted firms to reduce staff levels once again, although the rate of job shedding eased compared to August. On the price front, input cost inflation rose to a 17-month high, chiefly driven by suppliers’ shortages, while output charges continued to fall in September but at a much softer pace.

Commenting on the reading, Oliver Mangan, AIB chief economist, noted:

“The details of the September survey show clear signs of a loss of momentum in manufacturing. […] “Overall, the September PMI data show that Covid-19 continues to result in challenging business conditions in the manufacturing sector. Firms, though, remain hopeful that the business environment will improve next year.”

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