Ireland: Manufacturing PMI jumps to almost eighteen-year high in November
December 1, 2017
The Investec manufacturing Purchasing Managers’ Index (PMI) surged from 54.4 points in October to 58.1 points in November, the highest reading since December 1999. It remains comfortably above the 50-point threshold that separates expansion from contraction in the manufacturing sector, where it has been for almost four and a half years.
November’s jump was driven by sharper increases in output, new orders and employment. New orders expanded at the fastest pace since 1999 and at one of the fastest rates in the survey’s history. The increase in new orders was buttressed by improving demand, particularly from overseas markets. Output rose at the fastest rate since August 2014, driving an increase in staffing to keep up with increased work volume. Higher staffing, however, failed to stem an increase of backlogs of work, which expanded at the fastest pace this year. Regarding price developments, input prices rose on the back of higher prices for raw materials and led Irish manufacturers to raise output prices as a result.
Assessing the latest one-year outlook reading, Investec Chief Economist for Ireland Philip O’Sullivan commented:
“The expectations index of Future Output shows that Irish manufacturing businesses remain very upbeat about the prospects for the sector, with only one in sixteen panelists expecting to see a reduction in production over the coming 12 months. The IMF’s latest projections show global economic growth accelerating to a seven year high of 3.7% in 2018 (Investec sees it +3.9%), so given the extent to which the Irish economy is leveraged to international developments we believe that manufacturers here are right to feel confident about the future.”