Boost to Irish manufacturing ahead of end of transition period

Irish manufacturing firms saw a boost to business in December ahead of the end of the transition period, according to an industry survey.

Demand accelerated to guard against a potential hard Brexit, the Purchasing Managers’ Index (PMI) indicated.

Suppliers’ delivery times lengthened significantly as a result.

Oliver Mangan, AIB chief economist, said: “All five components of the PMI rose again in December for the second month running and all are well into positive growth territory.

“New orders increased strongly in the month, which translated into a marked rise in production.

“This was partly due to customers bringing forward orders with the Brexit transition period expiring at the end of the month.

“The same factor also saw manufacturers ramp up their purchases and stocks of inputs.”

New orders and output rose at the fastest rates since July’s post-lockdown bounce and purchasing accelerated as firms sought to expand inventories to guard against a potential hard Brexit, the AIB Ireland Manufacturing PMI survey showed.

Mr Mangan said higher work volumes saw firms increase their workforce for the third consecutive month, with employment expanding at its strongest rate since April 2019.

“Supply chains remain under pressure, with manufacturers reporting shortages in raw materials as well as delays in deliveries owing to congestion at ports and on roads.

“Price pressures continue to build, with a further sharp increase in input prices in particular.

“Firms remain optimistic about the 12-month outlook for production, no doubt hopeful that the recent positive news on Covid vaccines will help bring about an improvement in economic conditions over the course of 2021.”

Online Editors