Ireland: Manufacturing PMI drops markedly in January
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.