Irish manufacturing booms again in May but price hikes mean Government 'needs to target stimulus'   

Irish factories, such as the Pfizer site in Ringaskiddy, Co Cork, faced a sharp rise in input costs, with prices of  "steel, wood, paper, chemicals and plastics" all increasing in May, according to the survey. 

Irish factories boomed for a second month in May as the global economy roared back from the Covid slump but an increase in manufacturing costs poses a problem for the Government as it plans its economic stimulus programme. 

The AIB manufacturing survey of Irish purchasing managers is closely watched around the world because so many multinationals have huge facilities in pharmaceutical, medical devices and IT based here.  

The survey for May showed its the Irish manufacturing index, or PMI, climbed to a new record since the survey began in 1998 with all components -- including new orders, output, and employment --  registering increases. 

Output climbed "both domestically and in overseas markets", said chief economist Oliver Mangan at AIB which helps compile the survey.

However, the global boom has pushed up shortages of everything from raw materials to shipping containers and Irish factories faced a sharp rise in input costs, with prices of  "steel, wood, paper, chemicals and plastics" all increasing in May, according to the survey. 

Professor Kieran McQuinn at the Economic and Social Research Institute said that any stimulus planned by the Government when the economy reopens fully will need to carefully targeted. 

Housing, he said, was the area that the Government will have to target for investment, as rents and house prices rise amid the shortages of new homes.