Ireland PMI June 2021

Ireland

Ireland: Manufacturing PMI edges down in June, but remains in expansionary terrain

July 1, 2021

The AIB manufacturing Purchasing Managers’ Index (PMI) remained broadly stable in June, edging down to 64.0 from May’s 64.1 record-high reading. As a result, the index remained comfortably above the 50-threshold indicating another solid improvement in Irish manufacturing business conditions compared to the previous month.

June’s result largely reflected the sharpest growth in new orders on record as easing domestic restrictions released pent-up demand. Moreover, exports orders expanded at a solid pace, albeit moderating from the prior month. Against this backdrop, output rose at the second-fastest pace in history and manufacturers increased their workforce numbers to cope with firming demand. Less positively, however, supply chain disruptions persisted, resulting in a spike in input cost inflation and prompting firms to increase their output prices at record-breaking rate.

Oliver Mangan, AIB chief economist, added:

“The sub-components of the Irish PMI survey all point to continuing rapidly improving business conditions in manufacturing. Meanwhile, the 12-month outlook for production remained upbeat, but fell back appreciably from May on concerns that the current very strong rebound in demand would not be sustained to mid-2022."

FocusEconomics Consensus Forecast panelists project fixed investment to contract 8.4% in 2021, which is down 2.9 percentage points from last month’s forecast. For 2022, the panel sees fixed investment growth of 8.8%.


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Ireland Manufacturing PMI June 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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