Ireland’s factories kept growing strongly in October, with order books filling and jobs being added, but manufacturers warned that rising energy, fuel and raw material costs are feeding through to the prices they charge. The AIB Irish manufacturing PMI, compiled by S&P Global and published on Monday, 2 November, came in at 55.2, down slightly from 55.5 in September.
Any reading above 50 signals expansion, so October’s figure points to another month of robust growth, even if it eased a touch from September’s four-and-a-half-year high.
Orders and jobs on the rise
Production growth slowed slightly but remained solid. New orders rose at the second-fastest pace since April 2022, according to RTÉ, driven by stronger sales at home and abroad. Export orders increased for a ninth month in a row.
Factories responded by taking on more staff. Job creation climbed to a three-month high as companies hired to keep up with workloads and expand capacity.
Purchasing activity grew at its fastest rate since May, and stocks of raw materials and components rose at the sharpest pace since January 2023. Some firms said they were deliberately building safety stocks to guard against shipping delays and tight transport capacity.
Irish manufacturing PMI shows cost squeeze
The less welcome news was on prices. Input cost inflation accelerated to its quickest pace since June, with manufacturers pointing to higher energy, fuel and raw material bills. Investing.com described the rise in costs as sharp, at a four-month high.
Firms are passing at least some of that on. Output prices, or factory gate charges, rose at the strongest rate since June as manufacturers handed on higher transport costs to customers. Some respondents also cited subdued consumer confidence as a challenge.
For households, factory gate prices are one of the earlier signals of where shop prices could head, so the trend will be watched closely by economists tracking inflation.
How Ireland compares
Ireland’s reading compares favourably with its neighbours. Investing.com noted the eurozone flash PMI stood at 52.4 and the UK flash PMI at 52.8, while the US reading was 56.0. AIB chief economist David McNamara commented on where Ireland sits against those economies.
Upbeat outlook
Confidence about the year ahead is holding up. About 41% of manufacturers surveyed expect output to rise over the next 12 months, up from 38% in September, while only 8% foresee a fall. Firms pointed to plans to grow export markets, new marketing strategies and hopes that geopolitical tensions will ease.
Overall, the latest Irish manufacturing PMI paints a picture of a sector in good health, but one where higher operating costs are becoming harder to absorb.
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Sources: RTÉ News (Reuters), Investing.com
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