After two consecutive months of decline, Irish manufacturing activity showed slight growth in January, indicating an increase in confidence in the sector, according to a survey released on Wednesday. The AIB S&P Global Manufacturing Purchasing Managers’ Index (PMI) rose to 50.1 from 48.7 in December. The drop below the 50-point threshold, which marks expansion, was the first time this happened since May 2020.
Despite new orders contracting for the eighth consecutive month, the rate of contraction slowed down compared to the end of last year. As a result, firms could clear their workloads, and finished goods stocks increased to their second-highest level in the survey’s history.
AIB’s Chief Economist, Oliver Mangan, highlighted the positive aspects of the January survey, such as the expansion of employment and a reduction in supplier delivery times. This clearly indicates that the pressures on supply chains have significantly decreased.
As a result, confidence among manufacturers rose to a near-one-year high, and inflationary pressures were reduced. The input cost and output price inflation rates decreased to 24 and 22-month lows, respectively.
Although these rates were more robust than their historical averages, the input cost sub-index dropped to 64.5 from a record high of 92.7 last March.
This is excellent news for the economy and hopefully will have a knock-on effect on the export business, which is beneficial to us in the Global Irish community. Find the full report from AIB’s Economic Research sector here.
