Ireland: Manufacturing PMI eases in October but remains well above in expansionary territory
November 2, 2015
The Investec Manufacturing Purchasing Managers’ Index (PMI) inched down from 53.8 in September to 53.6 in October. In spite of the drop, the PMI still remained comfortably above the 50-threshold that indicates expansion in the manufacturing sector where it has been for 29 months.
October’s result mainly reflected a slight drop in output. However, this was offset by a noticeable expansion in new orders and higher sales in various export markets. Employment rose and backlogs of work continued to fall in October in response to higher output requirements. Furthermore, stocks of finished products decreased for the first time since May due to falling amounts of outstanding work and weak input growth. Input costs dropped for a second consecutive month, resulting from lower prices for energy and raw materials. In response to lower input costs, output prices also fell in October. Suppliers’ delivery time lengthened in October and purchasing activity rose fractionally on expectations of decelerating demand.
According to the survey report, “The latest Investec Manufacturing PMI Ireland report reveals a further solid improvement in business conditions in October. With the Quantity of Purchases index remaining in positive territory (where it has resided in each of the past 21 months) and headcounts continuing to rise (albeit slightly), the indications are that manufacturing firms here remain positive on the outlook, but perhaps not as much as they did earlier in the year when the prospects for the global economy (and, within that, emerging markets in particular) seemed stronger. In any event, given the location of where most of the country’s exports go and the recent pullback in the value of the euro, our view is that Ireland should be more insulated from the international headwinds than most.”