Activity in manufacturing sector improves slightly
Activity in the manufacturing sector improved slightly in July, according to new data.
The latest AIB Manufacturing PMI shows that the marginal improvement in the sector was driven by a renewed rise in output and accelerating jobs growth.
Meanwhile, the contraction in new orders eased on the previous month.
The headline index increased from 47.4 in June to 50.1 in July.
Readings above 50 indicate overall growth in activity.
This marks a shift from the first half of the year, following four months of contraction.
Despite this, respondents reported continued weak client demand.
“This was reflected in a further fall in new orders, albeit the rate of contraction eased compared to June,” said David McNamara, AIB Chief Economist.
“Firms linked this drop to the current economic climate which has impacted both domestic and foreign demand.
“This was also reflected in new export orders, with the respective seasonally adjusted index coming below 50 for the sixth successive month,” he added.
Demand from the US, UK and Germany were cited as key sources of weak demand.
Stocks of both inputs and finished goods fell again due to the declining levels of new orders and at an accelerated pace in July.
Delivery times were unchanged, while a further contraction in purchasing activity was also evident.
The findings show that hiring picked up in July, with companies expecting a stronger growth picture in the coming months and taking on more full- time hires.
Irish manufacturers maintained a positive outlook regarding activity over the coming 12 months, with sentiment the strongest recorded so far this year.
“Positive expectations stemmed from hopes of a brighter economic picture in the near term,” said Mr McNamara.
Price pressures remained a concerning feature of the survey in July.
Input price inflation accelerated to a 17-month high, reflecting higher raw material and transport costs.
Output price inflation also rose, as firms attempted to pass on higher input costs, but the rate of inflation eased on the month.
The Irish manufacturing PMI remains above the flash July readings for the Eurozone and US at 45.6 and 49.5, respectively, but below the UK at 51.8.
Article Source – Activity in manufacturing sector improves slightly – RTE
