Manufacturing activity again improves in July – Investec
Manufacturing activity in Ireland improved again in July according to the latest Investec Manufacturing PMI report.
However heading PMI has reduced to 54.6 from a 23-month high of 56.0 in June, suggesting that growth has moderated, anything above a mark of 50 is deemed growth.
According to respondents of the Investec survey, the latest increase was mainly attributable to new order growth.
July saw a sharp rise in new orders recorded, with panellists reporting new work from both new and existing clients, although the rate of growth eased slightly.
New export orders increased for the eleventh consecutive month, but at the slowest rate since November last year. In addition some panellists mentioned having expanded into new markets.
The growth in new orders spurred a further increase in manufacturers’ output levels, extending the current sequence of rising output to one year, but the rate of growth did ease to a three-month low.
Given the strong demand conditions, there were signs of emerging capacity pressures with backlogs of work increasing for three consecutive months and post-production inventory levels declining in July (and eight of the past nine months).
In addition, suppliers’ delivery times lengthened to the greatest extent in over six years as vendors struggled to meet strong demand for inputs.
The increased demand has meant that manufacturers again reported increasing staffing levels. However, although the current sequence of job creation has now extended to ten months, employment in July increased at its slowest pace since October last year.
On the margin side, input prices continued to rise sharply, although input cost inflation eased in July and the latest increase was the weakest in the year-to-date.
While the rate of growth in output prices also moderated last month, firms have increased prices for fourteen successive months.
Looking into the second half of 2017, manufacturers said that the remain positive, with optimism linked to expectations of further growth in both domestic and international orders.
"Following a strong performance by the manufacturing sector in the first half of this year, and the generally improving global backdrop, we also remain upbeat about prospects for the sector over the remainder of the year," a spokesperson for Investec said.