Ireland: Manufacturing PMI ticks down in December
January 2, 2020
Business conditions in the Irish manufacturing sector continued to deteriorate in December, albeit the downturn was mild. The AIB manufacturing Purchasing Managers’ Index (PMI) ticked down to 49.5 in December from 49.7 in November, thus moving further below the 50-threshold that indicates a deterioration in manufacturing business conditions.
December’s fall largely reflected a drop in output and new orders. Production fell at a sharper clip in December amid increasing stock levels among firms. Meanwhile, the volume of new orders contracted in December, reflecting weak exports to the UK market; however, the rate of contraction was mild. Consequently, firms cut staffing levels for the second consecutive month in December. That said, the pace of job shedding was marginal and moderated from the previous month. On the price front, a stronger sterling relative to the euro increased firms’ cost burdens; nevertheless, the rate of input cost inflation slowed to the second-weakest since 2016. Meanwhile, output charge inflation was broadly stable in December. Lastly, firms’ expectations for production were more upbeat in December, marking the highest level of confidence in six months, amid improving global demand.
Author: Hanna Andersson, Economist