Manufacturing takes nosedive as lockdown halts production
Latest AIB purchasing managers' index points to record falls in output and new orders
New export orders contracted at a survey record pace, with the decline sharper than that recorded for total new orders. Photograph: Getty Images
Manufacturing in the Republic fell at a near record rate in April, with output, new orders, exports and purchasing all registering sharp declines from lockdowns imposed here and elsewhere.
The latest AIB purchasing managers' index (PMI) survey of Irish manufacturers highlighted what it described as “a deepening downturn in the sector at the start of the second quarter”.
The headline index plummeted to 36 in April, from 45.1 in March, the lowest recorded since March 2009. Scores below 50 signify contraction.
The month-on-month decline in the headline figure, at 9.1 points, was a new survey record, while sub-indices for output, new orders, exports and purchasing all fell at the fastest rates in the survey’s 22-year history.
Jobs were shed at the joint fastest rate on record, and the 12-month outlook deteriorated further, AIB said.
“The AIB Irish Manufacturing PMI data for April paint a bleak picture of the impact on the sector of the lockdowns associated with the coronavirus pandemic,” said Oliver Mangan, AIB’s chief economist. “The severity of the hit to the sector is really shown by the very poor readings for the key sub-components of output, orders and employment.”
The survey showed the sub-index for output effectively halved, falling to a record low of just 21.8, with almost 70 per cent of firms reporting a decline in production.
New orders, meanwhile, fell to 27.9, with almost two thirds of companies reporting declines on foot of collapsing demand from both domestic and export markets.
New export orders contracted at a survey record pace, with the decline sharper than that recorded for total new orders.
Employment also took a hammering, with over 40 per cent of firms cutting staff numbers.
AIB also noted that purchasing activity was substantially scaled back in light of the collapse in demand linked to the global pandemic. The volume of inputs ordered by manufacturers also fell at a record rate.
“The Irish figures are no surprise as they are in line with global trends,” Mr Mangan said. “The flash readings for the euro zone, UK and US manufacturing PMIs for April show declines to 33.6, 32.9 and 36.9 respectively, similar readings to Ireland.
“ There were some glimmers of hope in the very weak Irish data. There was a smaller decline in the new orders index than in March, while the fall in the future output index was very modest in April, having plunged in March.”
Mr Mangan said the data would improve as lockdown restrictions were eased.