Ireland: Manufacturing PMI loses ground in April, falling to an over two-year low
May 1, 2019
Business conditions in Ireland’s manufacturing sector continued to ease at the beginning of the second quarter, as the AIB manufacturing Purchasing Managers’ Index (PMI) posted a lower reading in April. The index fell to 52.5, down from 53.9 in March, and marked the weakest improvement in operating conditions since October 2016 amid a wider downturn in the Eurozone and lingering uncertainty over the ultimate outcome on Brexit. That said, April’s print once again outperformed the manufacturing PMIs of leading Eurozone peers and came in well above the 47.8 registered for the bloc as a whole.
Growth in output and new orders decelerated in April on a slowdown in domestic and overseas demand. In spite of the softer growth dynamics, manufacturing firms continued to build up their inventories at a sharp pace, in a bid to cushion any Brexit-induced supply disruptions. Stocks of finished goods rose at a record-high rate. Firms also front-loaded their purchases of raw materials, in case of any availability problems owing to Brexit, thus causing overall input prices to climb. Manufacturers lifted output prices only marginally in response, however. On the employment front, firms continued to hire at a solid stride, although the rate of job creation slowed to a three-month low. Meanwhile, business sentiment remained fairly strong, but dipped slightly from March as Brexit uncertainty curbed optimism.