Irish manufacturing rebounds in August despite global slump

Irish manufacturing activity expanded for the first time in six months in August “driven by a fresh upturn in new orders”.

Sluggish global demand has triggered a slump in manufacturing across Europe and the US but the latest Irish figures – contained in AIB’s purchasing managers’ index (PMI) survey for August – appeared to buck the global trend.

The headline index rose to 50.8 per cent this month, up from 47 in July and 47.3 in June. With anything above 50 signifying expansion, the figure is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.

The rate of expansion for August was only marginal overall and weaker than the historical average, the report said. Nonetheless the expansion in order book volumes was in contrast to declines posted in each of the last five survey periods and the second-strongest over the last 15 months.

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“Contributing to the uplift in total sales was a renewed and solid increase in demand from overseas,” it said. The expansion in new export orders was the first since May 2022 and the joint-fastest in a year and a half.

AIB’s survey noted that firms responded to higher volumes of new work by adding to their headcounts. The latest rise in employment was solid overall and among the fastest in the last year.

“The renewed upturn in overall demand meant that manufacturing production neared the point of stabilisation during August,” the bank said, noting firms were hopeful that the upward trend would continue into the future and, as such, noted a stronger trend in optimism towards their outlook for output in the year ahead.

AIB’s chief economist Oliver Mangan said: “A pickup in new orders was a key driver of the improvement in Irish manufacturing in August”.

“They rose for the first time in six months, with particularly strong growth in new export orders which ended a 14-month sequence of declines,” he said.

“Firms attributed the rebound to better demand conditions. The pickup in new orders saw manufacturing production move very close to stabilisation in August following a number of months of sharp falls,” he said.