Ireland: Manufacturing PMI drops in September
October 2, 2017
The Investec manufacturing Purchasing Managers’ Index (PMI) edged down from an over two-year high of 56.1 in August to 55.4 in September. Despite the drop, the indicator remains comfortably above the 50 threshold that separates expansion from contraction in the manufacturing sector, where it has been for over four years.
September’s print reflects slower expansions in output and employment. Staffing among manufacturing firms rose, but at the slowest rate since September 2016. As employment growth slowed and growth in new orders quickened, backlogs of work accumulated. Growth in new orders rose at the fastest pace since July 2015. New export orders also increased, albeit at a slower pace; they were dragged down by lower demand volume from the UK due to the current strength of the euro against the pound. Regarding price developments, input cost inflation accelerated and resulted in higher output prices for clients.
Assessing the latest one-year outlook reading among Irish manufacturers, Investec Chief Economist for Ireland Philip O’Sullivan commented that:
“The forward-looking Future Output index improved to the highest in four months in September, with seven times as many respondents predicting a rise in output over the next 12 months against those who are pessimistic. Given the strengthening economic backdrop both at home and abroad, we concur with those who are positive on the outlook.”