Irish manufacturing tumbles following Brexit vote
Published 02/08/2016 | 07:27
New orders within Irish manufacturing have contracted for the first time in more than three years as Britain's decision to leave the EU begins to take its toll, new research has shown.
According to the Investec Manufacturing PMI, the sector grew at its weakest level in its 38-month sequence of expansion.
The headline reading for the sector dipped to 50.2, down from 53 in June.
It is understood Ireland's reliance on the UK market as an important export destination has led to the marginal decline in new orders. New export orders is back in negative territory for the second time over the past three months.
Despite the dip in new business there was some good news for Irish manufacturers as output prices rose in July with input costs also increasing, but only sligthly.
Investec chief economist Philip O'Sullivan warned of increased pressure on manufacturers to reduce their output prices.
"Given the adverse (from the perspective of Irish exporters) move in the euro-sterling exchange rate, we think there will likely be downward pressure on output prices in the coming months. Notwithstanding the more unsettled backdrop, the Employment index remains in positive territory.
"This is a disappointing, but not particularly surprising, report. While we draw a modicum of reassurance from the relatively modest declines in both new orders and new export orders, our sense is that conditions in the Irish manufacturing sector are likely to get worse before they get better," he said.