Manufacturing sees growth but concerns over weak sales pipelines persist

Respondents to the PMI survey commented on growth headwinds from weak sales pipelines and depleted backlogs of work.Â
The Irish manufacturing sector recorded an upturn in September driven by a faster expansion of new business but firms were concerned about growth headwinds from weak sales pipelines and depleted backlogs of work, the latest AIB Manufacturing Purchasing Managersâ Index (PMI) shows.
The PMI reading for September stood at 51.8 which was marginally better than the 51.6 recorded in August. However, the latest reading remained below the three-year peak seen in June of 53.7.
The reading is derived from indicators for new orders, output, employment, suppliersâ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of the sector.
The PMI said that the growth in the sector was âdriven by a faster expansion of new business intakes during Septemberâ.
However, there were a ânumber of reports citing subdued customer demand, ongoing global trade uncertainty and intense competitive pressuresâ.
Production volumes were broadly unchanged in September, which contrasted with a solid rate of expansion for much of 2025 to date.
âSurvey respondents commented on growth headwinds from weak sales pipelines and depleted backlogs of work. Moreover, tighter inventory strategies for finished goods appeared to have acted as a brake on production in some cases. This was signalled by the steepest reduction in post-production inventory volumes for 15 years in September,â the PMI said.
Chief economist at AIB David McNamara said âoutput stagnated in September, with respondents citing more subdued demand conditionsâ.
âThis was also reflected in the continued fall in export orders, albeit total new orders growth accelerated, with new investments boosting demand overall,â he said.
The Irish manufacturing PMI reading was above the eurozoneâs and the UKâs which had readings of 49.5 and 46.2 but remained below the US at 52.
Employment continued to expand during the month extending the current period of growth to 10 months.
âHowever, the pace of growth eased as some firms noted the lack for suitable candidates to fill current vacancies,â Mr McNamara said.
Mr McNamara said while input price inflation accelerated during the month - due to higher commodity prices â output price inflation decelerated, with âmanufacturers citing pressure on pricing power due to intense competitionâ.
Nearly half businesses surveyed, 48%, forecasted an increase in production in the year ahead while 9% predicted a decline.
âHowever, optimism levels eased from August's eight-month high,â the PMI said.
âAnecdotal evidence suggested that hopes of a turnaround in global demand conditions had fuelled business confidence in September. Intense competition was often cited as a factor likely to weigh on growth.â