Ireland: Manufacturing PMI hits near two-year high in July
August 3, 2020
The AIB manufacturing Purchasing Managers’ Index (PMI) surged from 51.0 in June to 57.3 in July as the easing of containment measures continued, marking the best reading since August 2018. As such, the index climbed further above the 50-threshold that indicates and improvement in manufacturing business conditions compared with previous month.
July’s improvement was mainly driven by record-fast rising output and new orders as demand strengthened. Production increased at the fastest clip in over two decades, while new orders rose at the quickest rate since December 2017. Moreover, new export orders surged at the quickest pace in over two-and-a-half years, hinting at recovering international markets. Against this backdrop, firms raised their workforces for the first time since January.
On the price front, input cost inflation rose sharply in July amid renewed demand for manufacturing inputs, while output charge inflation increased at the fastest pace in over a year. Lastly, although confidence among Irish manufacturers remained optimistic amid the upturn in production and new orders, it remained historically muted, reflecting uncertainty over the post-pandemic business environment and renewed worries over Brexit.
Author: Hanna Andersson, Economist