Concern over Ireland’s manufacturing stamina

There is concern for the near-term performance of Irish manufactured goods exports in the aftermath of last week’s Brexit vote, despite significant growth being achieved in the last month.

The latest purchasing managers’ index (PMI) from Investec Ireland shows the manufacturing sector reached a three-month high in June, driven by a slight increase in new business orders and a return to growth in new export orders.

An overall reading of 53 points was measured, up from one of 51.5 in May. Anything above the neutral 50 point mark denotes an industry in growth mode.

However, while the sector has been growing for 37 consecutive months, June’s survey results were collected before the UK’s EU membership referendum last week, the results of which have tempered the positivity.

“Given sterling’s recent sharp fall against the euro and wider global uncertainties, we are cautious around the near-term prospects [for new export orders],” said Investec Ireland’s chief economist Philip O’Sullivan.

“Overall, this report reveals a much better performance by the sector, following a soft May. How enduring this proves to be remains to be seen, given the foreign exchange headwinds and all global growth concerns,” he added.

Meanwhile, the index for eurozone manufacturing saw a 0.2 point increase in June (with growth seen in Germany, France, Spain and Italy), but a four-month low and a drop into negative reading territory was noted in China. UK manufacturing, however, hit a five-month high before last week’s referendum.

However, compiler Markit warned that “almost all” the data from UK manufacturers were received before the June 23 vote.

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