Ireland: Manufacturing PMI declines to over two-year low
The AIB manufacturing Purchasing Managers’ Index (PMI) fell to 52.6 in January from 54.5 in December. The reading, thus, moved closer to the crucial 50-point threshold that separates expansion from contraction in manufacturing activity, marking the slowest pace of expansion since October 2016. That said, the index has seen uninterrupted improvement for over five years.
January’s reading reflected softer growth in both new orders and output, due to weaker demand in both domestic and international markets. New business grew at the slowest rate in more than two years, with a notable slowdown in export orders especially from the UK market as uncertainty around Brexit remains elevated. As a result, backlogs of work declined at the fastest pace in over two years, and the rate of job-creation eased to the lowest in 16 months. On the price front, input prices continued to climb sharply owing to higher prices for raw materials, thus leading firms to raise output prices. While still solid, business sentiment among Irish manufacturers continued to weak for the third month running.