Irish manufacturing output growth maintained in November, but order books weaken
Irish manufacturers indicated a sustained rebound in production volumes during November, with output growth edging up to its highest since February. However, there were signs of fragility as new orders returned to contraction and employment numbers decreased for the third month running, according to the November AIB Irish Manufacturing PMI. Margins pressures subsided in November, helped by the slowest rise in average cost burdens since June. At the same time, factory gate charges increased at a robust and accelerated pace.
Commenting on the survey results, David McNamara, AIB Chief Economist, said: “The November AIB Irish Manufacturing PMI indicated that the sector lost momentum this month, with the headline index falling marginally below the 50 neutral level to 49.9 from 51.5 in October. This is the third time in the past six months that it has been below 50. The fall in the index was due to weakness in new orders, which contracted at their sharpest pace since June. Despite the fall, the Irish manufacturing PMI remains above the flash November readings for the Eurozone, US and UK at 45.2, 48.8 and 48.6, respectively.
“While the headline index fell in November, output rose in the month for the second consecutive month and at the fastest pace since February. Some respondents noted inventory rebuilding had helped to underpin the rise in production volumes. However, as mentioned previously, new orders fell back into contractionary territory, after expanding for the first time since February last month, with firms attributing the weakness to fragile consumer demand and subdued activity from the main export markets. Against the backdrop of a muted demand environment, hiring declined for the third month in-a-row.
“There was some mixed news in terms of price pressures for the sector. The rate of inflation for input costs eased for the second straight month. However, output charge inflation accelerated to its second-highest reading since March 2023. Irish manufacturers continued to have an upbeat assessment of the outlook for activity levels over the coming 12 months, albeit it was slightly below October levels.”