Ireland PMI January 2021


Ireland: Manufacturing PMI drops markedly in January

February 1, 2021

The AIB manufacturing Purchasing Managers’ Index (PMI) dropped markedly to 51.8 in January from December’s 57.2, marking the worst reading since October. That said, the index still remained above the 50-threshold, indicating an improvement in Irish business conditions compared to the previous month.

January’s reading largely came on the back of sharp drops in new orders and output. New business fell at the fastest pace since May last year, owing to stricter lockdown measures, weak European demand and new UK trading regulations. Moreover, production also contracted at a steep rate amid business shutdowns and supply delays. Despite this, employment rose for the fourth month straight, albeit only marginally. On the price front, input costs rose at the quickest clip since November 2018 amid longer supply delivery times due to the post-Brexit trade disruption. As a consequence, output charge inflation hit a 22-month high. Lastly, manufacturers turned more optimistic regarding the outlook for the coming year, with overall confidence the highest since May 2019.

FocusEconomics Consensus Forecast panelists project fixed investment to contract 8.7% in 2021, which is down 1.8 percentage points from last month’s forecast. For 2022, the panel sees fixed investment growth of 5.3%.

Author:, Economist

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Ireland PMI Chart

Ireland Manufacturing PMI January 2021

Note: Markit Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: IHS Markit, AIB

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