Activity in Ireland’s manufacturing sector expanded to a three-month high in May
Activity in Ireland’s manufacturing sector expanded to a three-month high in May, with the speed of growth of output quickening to a nine month high.
This marks two years of non-stop growth as firms increased prices slightly to offset cost pressures.
The Investec Manufacturing Purchasing Managers’ Index rose to 57.1 in May from 55.8 in April, just shy of the 15-year high of 57.5 hit in February.
The index has held above the 50 line denoting growth since May 2013, when Ireland was in an international bailout programme.
The PMI subindex measuring output prices among Irish manufacturers was above the breakeven line for the second month running for the first time in almost a year, with a reading of 50.9 in May, down slightly from 51.8 in April. Manufacturers’ costs have risen sharply in the past three months.
“The strength of sterling and the US dollar were once again identified by respondents as the principal factor that is pushing up on costs”
“Despite the cost pressures, the rate of growth in the Quantity of Purchases index quickened to the fastest since February 2011, which gives a further indication of the favourable demand conditions in the sector at this time.”
Investec Ireland Chief Economist, Philip O’Sullivan
Mr O’Sullivan also noted that the then upcoming UK General Election had been seen as a key risk factor for the manufacturing sector here.
He said that the surprise overall majority achieved by the Conservatives removed that risk, with the renewed strength in the pound relative to the euro since the election providing a renewed tailwind for the 15% of Irish merchandise exports that go to the UK.
Manufacturing, May, PMI