Manufacturing growth holds steady as Brexit boosts inventories – PMI
Manufacturing activity grew at an almost identical rate in March compared to a month earlier, as further stockpiling ahead of Brexit mostly offset a dip in the level of output growth, a new survey shows.
AIB’s manufacturing purchasing managers’ index stood at 53.9 in March, down slightly from 54 in February, but extending the run of consecutive monthly growth to almost six years.
The reading also remained above the more than two-year low the survey fell back to in January and well ahead of the flash March reading for the euro zone as a whole, which sank to a near six-year low of 47.6.
While Ireland’s fast growing economy has weathered the uncertainty created by Brexit, thes survey showed that manufacturers were ramping up their preparations as Brexit approached by adding to their pre-production inventories.
The sub-index measuring stocks of purchases rose further to 56.4 in March from 55.6 in February.
This was another new high in the 21-year history of the survey as its authors pointed to anecdotal evidence from companies that they had brought forward stock purchases to secure supplies in the event of disruption.
That all but made up for the dip in the level of output growth last month, although new business from abroad also increased at the fastest pace in four months, amid some reports of greater demand from UK firms.
“Overall, the continued strength of the Irish Manufacturing PMI is very notable given the loss of momentum in the sector globally in recent months, especially in Europe,” AIB’s chief economist Oliver Mangan said.
“It augurs well for the growth prospects of the Irish economy this year,” the economist added.
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