Ireland: Manufacturing PMI strengthens in July
August 4, 2015
The Investec Manufacturing Purchasing Managers’ Index (PMI) rose from 54.6 in June, which was the lowest value since February 2014, to 56.7 in July. As a result, the index moved further above the 50-threshold that indicates expansion in the manufacturing sector. The index has remained in expansionary territory for 26 months.
July’s improvement mainly reflected that growth of output, new orders and employment all sped up compared to June. New export orders also strengthened, partly benefitting from the weak euro. In addition, firms’ purchasing activity increased in July, while stocks of purchases decreased, albeit at a softer rate than in June. While input prices continued to rise in July, partly driven by a weak euro that more than offset lower raw material costs, they increased at the mildest pace in five months. Conversely, output prices recorded a modest decline in July.
According to the survey report, “the latest Investec Manufacturing PMI Ireland report reveals a further marked improvement in business conditions, having strengthened over the previous month. […] Overall, the strengthening of output, new orders and employment in July gives confidence to our view that activity levels for Irish manufacturing firms are likely to pick up again in Q3 after a slower finish to Q2. While increased uncertainty over Greece is likely to have weighed on Markit’s flash Eurozone composite PMI which softened to 53.7 in July, 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.”