Irish manufacturing sector hits nine-month low in December

But activity and growth remains solid, despite slowdown in new orders

The manufacturing sector hit a nine-month low in December as output slowed, new orders hit their weakest level in eight months and job growth was at a 15-month low.

The IHS Markit Manufacturing PMI, which measures the health of the sector, fell to 54.5 in the final month of 2018, down from 55.4 in November. However, the reading still showed a solid improvement in business conditions, remaining comfortably above the mark that separates expansion and contraction.

Despite the slowing in new orders, the sector continued to show an increase, with December marking the 29th successive month of new order growth. There was also improved export demand from the UK and the Middle East during the month.

Manufacturers were also anticipating further growth in demand, with December marking the 27th successive month of employment growth, albeit at a weaker rate than before.



The survey showed input price inflation eased to a 14-month low last month, but costs for raw materials such as steel and paper packaging continued to climb. Output charges were unchanged.

Purchasing activity among Irish manufacturers rose in December, with concerns of supply disruptions after Brexit potentially fuelling some activity.

Sentiment among Irish manufacturers was at a three-month high, with more than half confident that output would rise from present levels in 12 months' time. That confidence was attributed to greater future customer demand, new product lines launching in 2019 and hopes of increased export sales in the US and Asia.

"Irish manufacturers experienced a slowdown in growth in December, with PMI data indicating weaker rises in output, new orders and employment," said Amritpal Virdee, economist at IHS Markit. "While some firms saw signs of weaker demand, panellists are confident of a pick-up in the new year, supporting strong growth of purchasing activity and stockbuilding.

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist