Ireland: Manufacturing PMI drops in August
September 1, 2015
The Investec Manufacturing Purchasing Managers’ Index (PMI) moderated from 56.7 in July to 53.6 in August, marking the lowest reading in a year-and-a-half. Nevertheless, the PMI remained comfortably above the 50-threshold that indicates expansion in the manufacturing sector. The index has remained in expansionary territory for 27 months.
August’s moderation mainly reflected that output, new orders and employment all expanded at a softer rate than in July. New orders growth decelerated to the slowest pace in a year-and-a-half and new export business slowed slightly in August. Slower growth of new business led to a modest drop in backlogs of work and an increase in the stocks of finished goods. Inflationary pressures eased in August, with input cost inflation dropping to the lowest level in half-a-year and output charges falling for a third consecutive month.
According to the survey report, “panellists indicated a softening in the rate of growth in New Orders from both at home and abroad. We expect that the more troubled international backdrop and the slight euro softening seen last month were key factors behind this development. […] While this is clearly a more downbeat Manufacturing PMI release compared to what we have grown accustomed to over the past 18 months or so, we are not overly concerned at this point. On balance, the sector still has significant tailwinds behind it and we still expect to see a strong finish to the year.”