Ireland: Manufacturing PMI falls in December
January 2, 2019
The Investec manufacturing Purchasing Managers’ Index (PMI) fell from 55.4 in November to 54.5 in December. The reading thus edged closer to the critical 50-point threshold that separates expansion from contraction in manufacturing activity, signaling a robust but slightly weaker improvement in business conditions, which have now seen an uninterrupted improvement for over five years.
December’s print reflected slower growth in output, new orders and employment. Output rose at the weakest pace in nine months, while new orders grew at the slowest rate in eight months. Higher demand in both domestic and overseas markets, especially in the U.K. and the Middle East drove the upturns. While firms hired more workers to deal with the greater backlogs of work, the rate of staff in-take eased to the lowest in over a year. On the price front, input prices rose on higher costs for raw materials, such as steel and paper packaging, although overall input inflation slowed considerably. Consequently, output prices were kept stable in December from the previous month. Despite the moderation in the PMI in December, business sentiment among Irish manufacturers strengthened, with a more upbeat outlook on output.
Author: Nihad Ahmed, Economist