Ireland: Manufacturing PMI returns to expansionary territory in June
July 1, 2020
The AIB manufacturing Purchasing Managers’ Index (PMI) jumped from 39.2 in May to 51.0 in June, marking a record monthly gain of 11.8. Thus, the index moved above the 50-threshold that indicates an improvement in manufacturing business conditions compared with the previous month.
June’s upturn largely reflected the easing of lockdown measures, with production and new orders increasing for the first time since February. Moreover, exports logged their quickest expansion in over a year, which buttressed new orders further. However, many firms operated below full capacity in June and thus continued to cut workforces. However, the rate of job shedding slowed to a four-month low. On the price front, both input costs and output charges fell in June, although at slower paces compared to the previous month. Lastly, lifting of restrictions also boosted confidence among Irish manufacturers, with the outlook for future output rising to a four-month high; that said, it remained historically subdued, reflecting uncertainty with regards to the severity of the fallout from the Covid-19 pandemic.
Author: Hanna Andersson, Economist