Manufacturing growth slows to its lowest since 2013
According to the latest Investec Manufacturing Purchasing Managers’ Index (PMI), manufacturing activity grew at the slowest rate in almost three years in May. the headline figure of growth slowed to 51.5, its lowest since July 2013.
The drop in growth is as a result of general weakening in demand with the new orders index slowing to a 30-month low, recording a very modest increase.
Investec said that at least some of the poor performance in the sector was related to the June 23 referendum on the UK’s place in the European Union and sterling’s recent weakness.
“With momentum appearing to be building behind the ‘Remain’ campaign, sterling has recently begun to strengthen against the single currency, which augurs well for the near-term outlook for many Irish exporters,” said Philip O’Sullivan, chief economist at Investec Ireland.
“Assuming that our base case that UK voters choose to remain in the EU comes to pass, we suspect that conditions for Irish manufacturing firms should pick up in Q3 and beyond,” he said.