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Ireland’s purchasing manager’s index fell in March amid reports of weak demand and and lower manufacturing activity globally, Ireland’s Allied Irish Banks reported on Monday.
Ireland’s PMI fell to 49.7 in March from 51.3 in February. The 50-point mark separates growth from contraction and shows manufacturing activity reduced from the previous month. It was the first contraction in three months, showing a weakening of momentum across the sector.
However, the country’s PMI was above that of the US, the UK and the Eurozone, which were at 49.3, 48.0, and 47.1 respectively. This illustrated ‘continued subdued manufacturing activity globally,’ said Oliver Mangan, chief economist at AIB.
He added: ‘A primary factor behind the weakening in Irish manufacturing in March was renewed declines in both orders and output, reflecting subdued underlying demand conditions. New exports orders remained particularly weak as a result of sluggish global demand. With order books declining, spare capacity is becoming increasingly evident as backlogs of work continued their steep decline in March. Meanwhile, stocks of finished goods fell for the first time in eight months, while firms continued to scale back purchases of inputs.’
Weakened demand meant manufacturers could focus on outstanding work at the end of 2023’s first quarter, as the backlog reduced by its fastest pace since September 2011. Meanwhile, input price inflation fell to a 33-month low, with the upturn in selling prices the weakest in 27 months, amid signs of a moderation of raw material and energy prices.
AIB’s Oliver Mangan said: ‘On a positive note, employment continued to expand, albeit at a modest pace, while supplier delivery times shortened as supply chain issues abate. Irish manufacturers continue to be optimistic about the future, with sentiment on the outlook for the coming 12 months remaining close to its highest level in the past year.’
The manufacturing PMI is compiled by S&P Global from the responses to questionnaires sent to around 250 manufacturers with data collected between March 10 and 24.
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