Ireland: Manufacturing PMI moderates in June; still points to expansion
July 1, 2015
The Investec Manufacturing Purchasing Managers’ Index (PMI) receded from 57.1 in May to 54.6 in June, which was the lowest value since February 2014. However, the index remains above the 50-threshold that indicates expansion in the manufacturing sector.
June’s moderation mainly reflected that new orders grew at a slower pace than in the previous month. New export orders growth also moderated compared to May, albeit to a lesser extent. Moreover, while employment continued to strengthen in June, it grew less than in the previous month. In addition, backlogs of work decreased at the fastest rate since September 2014. While input prices rose markedly in June, largely owing to the weak euro, firms reduced their output charges.
According to the survey report, “the latest Investec Manufacturing PMI Ireland report reveals a further marked improvement in business conditions, albeit at a somewhat slower pace than had been seen in recent months. […] Overall, while most of the indices point to a slower finish to Q2, our sense is that activity levels for Irish manufacturing firms are likely to pick up again in Q3, assuming that the fallout from Greece is contained. Markit’s Eurozone composite PMI recently improved to its highest level in more than four years, while the single currency’s continued weakness against both the dollar and sterling augurs well for exports to the US and UK, two critical markets for Irish exporters.”