Ireland: Manufacturing PMI dips to over six-year low in August
Business conditions in the Irish manufacturing sector worsened for the third consecutive month in August and marked the sharpest contraction since April 2013. The AIB manufacturing Purchasing Managers’ Index (PMI) inched down to 48.6 from 48.7 in July.
August’s print was underpinned by a continued drop in new business amid ongoing Brexit uncertainty and falling output. Export sales declined in the month, mainly owing to reduced orders from the UK. As a result, backlogs of work slid. Nonetheless, manufacturers continued to hire workers, although the rate of job creation was negligible. Despite a higher cost burden owing to increased prices for raw materials, firms lowered their output prices in a bid to remain competitive. Meanwhile, manufacturers’ sentiment soured in August, sliding to a 37-month low on Brexit uncertainty.
Commenting on the latest print, Oliver Mangan, AIB chief economist, stated:
“Irish manufacturing activity, then, has been hit by a double whammy of global weakness in the sector and Brexit uncertainty. It is unlikely to pick up until these headwinds subside. However, output could be boosted in the next couple of months if firms start to stock pile ahead of the latest Brexit cliff-edge date of end October.”