Irish manufacturing saw further downturn in December

There has been a mild downturn in the manufacturing sector, according to a final survey for 2019....
Jack Quann
Jack Quann

08.25 2 Jan 2020

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Irish manufacturing saw furthe...

Irish manufacturing saw further downturn in December

Jack Quann
Jack Quann

08.25 2 Jan 2020

Share this article

There has been a mild downturn in the manufacturing sector, according to a final survey for 2019.

The AIB PMI study revealed a further deterioration in business conditions in December.

However it found that the extent of the downturn "remained mild", with new orders and employment only fractionally lower than in November.


Exports remained the main drag on total new orders, linked to a weak UK market.

Output was also cut, as firms moved to address a build-up of unsold stock.

More positively, it found expectations continued to recover from September's low.

The PMI edged lower to 49.5 in December, from 49.7 in November.

manufacturing Source: AIB

The latest indicated an overall deterioration in manufacturing business conditions for the sixth time in the past seven months.

This is the longest downturn since the second half of 2011 through to early-2012.

A sharper fall in output and lower new business were mostly offset by the greatest lengthening in suppliers' delivery times in seven months.

While the volume of new orders received by manufacturers fell in December, following a two-month spell of marginal growth.

But the rate of contraction was weak, and slower than those registered from May to September.

"New export orders fell for the sixth month running, and at the second-fastest rate in over 10 years", the index found.

Job cuts

In terms of manufacturing, the workforce here was cut for the second month running in December - the first consecutive decline since 2013.

However the rate of job shedding was only marginal and eased since November.

And manufacturers' purchase prices continued to rise in December, extending the current sequence of increases to 44 months - the second-longest in the survey history.

"Greater cost pressures were partly attributed to the recent strengthening of sterling against the euro", the index said.

"That said, the rate of inflation eased to the second-weakest since July 2016, remaining well below the long-run survey average".

AIB chief economist is Oliver Mangan: "The stand-out feature of the December data is the marked decline of new export orders.

"These have contracted at a significant pace right through the second half of 2019.

"Yet again survey respondents called out the weakness in orders from the UK in particular, where Brexit-related uncertainty is weighing on demand.

"The softness in overseas demand is resulting in an ongoing fall in order backlogs and a build-up of stocks of finished goods.

"Firms have responded by cutting production levels and shedding jobs."

"On a positive note, confidence among Irish manufacturers regarding future output rose to a six-month high in December, suggesting that firms expect activity to pick up in 2020."

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AIB PMI Study Business Conditions Export Orders Irish Economy Irish Manufacturing Jobs Manufacturing Oliver Mangan PMI Purchase Prices UK Market Unsold Stock

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