Economy

Irish factory activity rebounds in July from lockdown lows

Irish manufacturing figures follow trends in Europe as restrictions on economies ease

Ireland’s manufacturing sector posted its fastest growth in almost two years in July. Photograph: Alan Betson

Tue Aug 4 2020 - 20:26

Ireland's manufacturing sector posted its fastest growth in almost two years in July, as it rebounded from Covid-19 lockdown lows, a survey showed on Tuesday.

The AIB IHS Markit manufacturing purchasing managers’ index (PMI) survey climbed to 57.3 in July from 51.0 in June, continuing its return from a low of 36.0 in April. A figure above 50 denotes growth.

The survey, which measures month-on-month change rather than an indication of overall level activity, is in line with the trend in other countries, said AIB chief economist Oliver Mangan.

Figures published on Monday showed that manufacturing activity across the euro zone expanded for the first time since early 2019 last month as demand rebounded after more easing of the restrictions imposed to quell the spread of coronavirus.

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The IHS Markit’s manufacturing index for the euro zone bounced to 51.8 in July from June’s 47.4 – the first time above the 50 mark that separates growth from contraction since January 2019.

“The strong reading for [Ireland in] July points to a sharp pick-up in activity, but from a low base in previous months during the lockdown period,” said Mr Mangan.

Output and new orders both expanded at some of the fastest rates recorded by the survey, although the 12-month outlook remained relatively subdued. The future output subindex was 60.3, down from 63.3 in June and 72.3 in January.

The rebound in manufacturing comes despite the fact that Ireland has reopened its economy more gradually than much of Europe. The Government is still advising against all non-essential international travel, and retaining restrictions on bars and indoor gatherings of over 50 people. – Reuters

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