Ireland: Manufacturing PMI inches up in September
October 1, 2015
The Investec Manufacturing Purchasing Managers’ Index (PMI) increased marginally from August’s one-and-a-half-year low of 53.6 to 53.8 in September. As a result, the PMI remained comfortably above the 50-threshold that indicates expansion in the manufacturing sector. The index has remained in expansionary territory for 27 months.
September’s tiny improvement mainly reflected that a notable expansion in total new business, which received a significant boost from rising new export orders, slightly offset a significant deceleration in output growth. Employment rose and backlogs of work continued to fall in September as output exceeded new business. Stocks of finished products also increased. Input costs dropped for the first time in seven months, resulting from lower prices for oil, food and steel. As a response to lower input costs, output charges also fell in September. Suppliers’ delivery time lengthened in September and purchasing activity decelerated on expectations of decelerating demand.
According to the survey report, “on balance, the latest Investec Manufacturing PMI Ireland release reveals a slightly greater strengthening of the health of the sector during September. […] We had described the previous month’s PMI release as being more downbeat compared to what we had grown accustomed to over the preceding 18 months, so we are relieved to see a slight uptick in the implied pace of expansion for the sector in September. Notwithstanding the troubled signs in a number of emerging markets and uncertainty around central bank actions in Ireland’s key non-Eurozone trading partners, we continue to view the sector as having more tailwinds than headwinds and, to that end, expect to see a stronger finish to 2015.”