Ireland: Manufacturing PMI improves and points to expansion in May
June 2, 2015
The Investec Manufacturing Purchasing Managers’ Index (PMI) rose from 55.8 in April to 57.1 in May. As a result, the index moved further above the 50-threshold that indicates expansion in the manufacturing sector.
May’s improvement mainly reflected an increase in new orders from both domestic and export markets. In addition, output and new orders rose at a faster pace than in April. Irish manufacturing companies increased their output prices for a second straight month on the back of rising input prices.
According to the survey report, “the latest Investec Manufacturing PMI Ireland report reveals a further improvement in business conditions in May. [...] At the beginning of May we identified the then upcoming UK General Election as a key risk factor for the manufacturing sector here, given that opinion polls had been pointing to a hung parliament and a resultant period of political uncertainty, with all that this would entail for sterling. In the event, the surprise overall majority achieved by the Conservatives has removed that risk, with the renewed strength in the pound relative to the single currency since the election providing a renewed tailwind for the 15% of Irish merchandise exports that go to Ireland’s next door neighbour. This should lead to further positive Investec Manufacturing PMI readings for Ireland in the coming months, assuming that developments in Greece don’t take a turn for the worse.”