Ireland: Manufacturing PMI tumbles to a near three-year low in May
Ireland’s manufacturing sector lost more momentum and expanded at the weakest pace since the aftermath of the UK’s EU referendum vote in July 2016. The AIB manufacturing Purchasing Managers’ Index (PMI) fell to 50.4 from 52.5 in April, thus moving closer to the critical 50-point threshold that separates expansion from contraction in activity. May’s reading once again outperformed the manufacturing PMIs of leading Eurozone peers and came in well above the 47.7 registered for the bloc.
A downturn in demand conditions caused output to shrink for the first time since the Brexit vote and new business to contract at the swiftest rate in six years. Exports sales also fell, although did so at a marginal pace. As a result, backlogs of work fell sharply in the month. Despite the drop in production, manufacturers hired more workers, with the rate of job creation modest. On the price front, input prices climbed, although did so at the slowest pace in almost three years amid lower prices for natural gas and resin; manufactures raised output prices in response. Meanwhile, business sentiment strengthened on an improved outlook on production.