Manufacturing & Supply Chain

Latest survey data from the AIB Ireland Manufacturing PMI® highlighted a stabilisation in overall business conditions, following modest downturns in September and October. Survey respondents commented on a slight uptick in production requirements, helped by signs of a turnaround in customer demand. Export sales remained subdued, however, with new orders from abroad decreasing for the third consecutive month in November.

Commenting on the survey results, Oliver Mangan, AIB Chief Economist, said: “The AIB Irish Manufacturing PMI survey for November showed a stabilisation in business conditions in the month. The headline index rose to 50.0 from 48.2 in October and 49.6 in September. It was the second highest reading since February. Furthermore, the Irish PMI remains well above elsewhere in Europe. The flash manufacturing PMI readings, though also up slightly, remained weak in November in the Eurozone and UK, at 43.8 and 46.7, respectively. Meantime, the flash US index came in at 49.4 in November.

“Very marginal increases in output and orders combined with a modest rise in employment were the key features of the November PMI data. Output rose fractionally following eight months of declines. Similarly, new orders edged slightly higher having fallen for most of the last eighteen months. Export orders, though, decreased again in November, with firms reporting continued subdued demand conditions in overseas markets. Meanwhile, employment rose modestly for a fifth consecutive month.

“Firms reported deliberate inventory reduction strategies against a backdrop of fewer supply bottlenecks and subdued customer demand. This was reflected in marked falls in stocks of both inputs and finished goods, with the latter declining at the sharpest pace in nearly two years. Meanwhile, input prices fell slightly in November, helped by lower raw material costs. This allowed manufacturers to continue to cut factory gate prices, which eased for the seventh consecutive month.

“Finally, firms remained optimistic on the outlook for the year ahead, though the index fell to its lowest level since July. Overall, November showed signs of stabilisation in manufacturing activity, but no real indication of an upturn, with export markets remaining weak in particular.”