Ireland: Manufacturing PMI gains some ground in February
The AIB manufacturing Purchasing Managers’ Index (PMI) rose to 54.0 in February from 52.6 in January. The print, thus, moved further above the critical 50-point threshold that separates expansion from contraction in manufacturing activity, reflecting an acceleration in the sector. The index has seen an uninterrupted improvement in business conditions for over five years.
February’s print reflected stronger growth in output and new orders, fueled by higher demand in domestic and overseas markets. Firms continued to hire more workers to deal with the increase in business, while backlogs of work declined for the sixth month running. Moreover, manufacturers built up the stock of inventories at the swiftest pace in history of the survey, owing to Brexit uncertainty. On the price front, although input prices climbed on higher raw material costs—notably steel—the rate of input inflation eased considerably. Firms raised output prices again in order to pass the burden of cost-adjustment onto consumers. While manufacturers remained optimistic, with expectations of increased demand and a rise in new export business, uncertainties surrounding Brexit weighed on overall sentiment, hurling it to a one-and-half-year low.