Irish manufacturing enjoys tempered Brexit recovery

New orders increased, marginally, in October....

Irish manufacturing enjoys tempered Brexit recovery

William Murphy, Flickr

The Irish manufacturing industry showed signs of recovery in October, as new orders and output climbed from the lows seen after the UK's decision to leave the European Union in June.

According to Investec's latest Purchasing Managers' Index, the headline PMI hit 52.1, compared to 51.3 in September.

Despite the small indications that client demand is growing once more, Investec economist Philip O'Sullivan remains committed to exercising caution.

"Growth in new export orders was only slight as panellists reported that sterling weakness made securing new work in the UK more difficult," O'Sullivan said.

"We previously spoke of ‘well-founded caution on the part of Irish manufacturers as we head into the year-end’.

"October’s modest improvement is not enough to make us change that assessment, not least given next week’s US elections, which could have a significant impact on the health of the sector (c. 22% of Irish merchandise exports go to the US)."

Input costs were up for the sixth month in a row, with increases in the cost of food and oil and a stronger dollar hurting manufacturers' margins. Some of this cost pressure was passed on by hiking output prices, as has been the trend over the past five months.