Thursday 22 August 2019

New orders fall as June PMI hits six-year low

 

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Stock image

Shawn Pogatchnik

Manufacturing conditions in Ireland have deteriorated to a six-year low, with Brexit worries cited as a key factor.

The AIB Ireland Manufacturing PMI published today measured activity at 49.8, down from 50.4 in May and back into negative territory for the first time since May 2013.

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The report said the fall in June orders "was sharp and quickened" at a pace last seen in January 2012. The decline in manufacturing backlogs accelerated from May, while sentiment among manufacturers - though still in positive territory - fell to its weakest level in nearly three years.

"The sharp slowdown in manufacturing activity globally is now being felt in Ireland, amid a marked weakening in international trade and increasing uncertainty in regard to Brexit," AIB chief economist Oliver Mangan said.

"The weak Irish reading is in line with that for manufacturing in our main export markets," he said, noting that the flash US PMI for June fell to a 10-year low of 50.1, while the May figure for the UK showed manufacturing there already contracting at 49.4. The eurozone has been negative for much longer, with the June flash PMI at 47.8.

Irish manufacturers reported facing higher prices for raw materials, particularly steel and pork.

Downturn: AIB chief economist Oliver Mangan
Downturn: AIB chief economist Oliver Mangan

Stocks of finished goods rose at the second-highest rate in the 21-year history of the index. "Some respondents indicated they had built up their post-production inventories in the hope of seeing an improvement in new orders," the report said.

June output improved as 24pc saw production rise versus 20pc reporting declines.

Irish Independent

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