Ireland PMI December 2016

Ireland

Ireland: Manufacturing PMI rises to 17-month high in December

January 2, 2017

The Investec Manufacturing Purchasing Managers’ Index (PMI) jumped from 53.7 in November to 55.7 in December, taking it further above the 50-threshold that separates expansion from contraction in the manufacturing sector, where it has been for 43 consecutive months.

December’s print reflected sharper increases in output, new orders and employment. Growth in new business was underpinned by stronger client demand and new orders expanded on the back of increased overseas demand for Irish goods. This resulted in a sharp rise in backlogs of work and a drop in stocks of finished goods to meet increased demand. Likewise, Irish manufacturers hired more staff in December to accommodate additional orders. Regarding price developments, input costs rose, albeit at a softer pace, and higher costs were passed onto consumers.

The survey report stated, “while growth slowed precipitously following the UK’s Brexit vote, the accelerated pace of expansion seen since then shows that the sector has gotten back on track, presumably aided by the kicker from a strong US dollar and ongoing domestic strengthening.”

FocusEconomics Consensus Forecast panelists expect investment to expand 6.2% in 2017, which is down 0.7 percentage points from last month’s forecast. For 2018, the panel sees investment rising 4.6%.


Author: Jean-Philippe Pourcelot, Economist

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Ireland Manufacturing PMI December 2016

Note: Markit Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 point to a contraction.
Source: Markit.


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