Irish manufacturing indicator rises to three-month high

Growth in the Irish manufacturing sector expanded to a three month high in March, with export orders now growing at the fastest rate since 2015.

Philip O'Sullivan, economist with Investec, said that the latest Investec Manufacturing PMI Ireland release shows a "bright start" to the second quarter, with the headline PMI rising to 55.0, a three month high, from 53.6 in March.

“This outturn was driven by improved market conditions both at home and abroad,” Mr O’Sullivan said.

Of particular note is the new export orders index, which indicates the fastest rate of growth in overseas orders since July 2015.

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On the margin side, while the rate of increase in input prices slowed for a second successive month, it remains sharp, with panellists attributing the latest increase to higher commodity prices and the relative weakness of the euro against the US dollar.

Looking ahead however, the forward-looking future output index indicates that sentiment has softened to the lowest since last August.

“This is a puzzling reading which conflicts with the faster growth in both hiring and purchases of inputs during April. It could be that seasonal issues are at play,” Mr O’Sullivan said, adding that his view is still that the outlook for Irish manufacturing firms “remains positive, supported by the improving international backdrop”.