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Manufacturing conditions continue to weaken amid fall in new orders

By November 1, 2023No Comments

Business conditions in the manufacturing sector continued to weaken in October, new figures show.

The latest Purchasing Managers Index from AIB reveals that activity weakened to the greatest extent in three months, driven by a fall in new orders and output.

The index dropped to 48.2 from 49.6 in September, and 50.8 in August.

Readings above 50 indicate overall growth in activity.

Companies in the sector said subdued demand in both domestic and export markets, higher borrowing costs and leaner inventory strategies all weighed on activity.

New orders in particular fell at their fastest pace since last December.

Oliver Mangan, AIB’s Chief Economist, said other elements of the October PMI also painted a weak picture for the sector.

“Employment numbers stagnated after increasing over the third quarter,” he said.

“There was another steep fall in order backlogs, as well as a renewed decline in stocks of finished goods,” he added.

The data shows that October also saw a reduction in the purchases of inputs, while the. tock of pre-production inventories declined too.

Manufacturers were also less optimistic on the outlook for the year ahead, though they continue to expect an increase in output.

Today’s report shows that input prices rose slightly in October, following six months of declines.

“This reflected higher fuel prices and transportation costs following the rise in oil prices since mid-year,” Mr Mangan said.

“Manufacturers, though, continued to lower factory gate prices, largely on account of further falls in their raw material prices,” he added.

Despite the further weakening of conditions, the Irish PMI remains higher than elsewhere in Europe.

The flash manufacturing PMI readings in the euro zone and UK remained very weak in October, at 43 and 45.2.

These were also well below the US index, which stood at 50.

Article Source: Manufacturing conditions continue to weaken amid fall in new orders – RTE

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