Uncertainty leads to decline in output
Employment in the manufacturing sector has fallen for the first time in three years, according to the latest purchasing managers' index (PMI) from AIB.
The decline was driven by a reduction in business output, as global uncertainty weighs on activity.
The PMI is an indicator designed to provide a single figure measure of the health of the industry. Last month the index fell to 49.7, indicating that the sector had declined. Any reading over 50 is deemed growth.
While there was a slight increase in new orders, sales of exports decreased, with the rate of contraction quickening amid weaker demand from the United States and UK, as global trading uncertainty remains.
Oliver Mangan, AIB chief economist, said: "Conditions in Irish manufacturing are best described as being flat.
"The primary source of the slowdown in manufacturing is weakening foreign demand."
Overall, the reading signalled the fifth deterioration in business conditions in the past six months. That being said, the rate of decline was marginal.
Meanwhile, cost burdens increased last month, fuelled by greater raw material prices, with higher costs for oil and pork noted in particular.
Elsewhere, business confidence improved to a five-month high, however it remained historically weak, as Brexit uncertainty weighed on business sentiment.
Nonetheless, firms continued to predict output growth over the coming year. Expectations of increased customer orders, especially from abroad, and investments in machinery were among the factors that supported optimism.