Ireland’s manufacturing sector had the steepest fall in new orders in April since late 2022 amid weakening demand, S&P Global data showed Wednesday.
The seasonally adjusted AIB Ireland manufacturing purchasing managers’ index declined to 47.6 in April from 49.6 in March. Falling further away from the neutral 50-mark, it indicates the pace of contraction increased.
The contraction in April was at the starkest rate since July 2023.
Notably, the rate of decline in new orders was the fastest since December 2022, amid subdued external demand from the UK and the eurozone.
AIB Chief Economist David McNamara said: ‘Stocks of both inputs and finished goods fell in April on the back of weakening demand, which was also reflected in a renewed decline in purchasing activity. Despite lower purchases, vendor delivery times lengthened in April, with the ongoing Red Sea shipping diversions a source of disruption to supply chains. Given the current challenges in the sector, firms paused hiring, with the employment index at the no-change level in April, ending a 3-month stretch of modest job creation.’
More positively, 43% of good producers expect a rise in output levels during the year ahead compared to merely 14% that anticipate a reduction. S&P Global said: ‘This pointed to an improvement in business confidence since March, although the respective index remained subdued in comparison to the long-run survey average. Companies expecting an upturn in production volumes generally noted hopes of a turnaround in client demand, alongside confidence linked to long-run business expansion plans.’
The AIB Ireland Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 250 manufacturers. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. The data were collected between April 11 and 23.
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