Irish manufacturing boom continues despite global supply disruption

Ringaskiddy container port. The findings suggest that the manufacturing recovery of the foreign-owned multinationals and Irish-owned factories continues apace.

Output of Irish factories continued to boom into August despite global shortages of materials, a closely-watched manufacturing survey has shown.

The findings of the AIB Manufacturing Purchasing Managers' Index (PMI) will come as a relief to the Government ahead of October's budget because it suggests that the manufacturing recovery of the foreign-owned multinationals and Irish-owned factories continues apace despite the huge global disruption to supply chains and hikes in raw material costs. 

The multinationals have helped account for a huge part of the Government's corporation tax receipts, as well as significant slice of income tax receipts during the pandemic.                          

The PMI headline reading of 62.8 in August was below the reading of 63.3 in July's index but any reading above 50 shows that manufacturing is expanding.  

"Ireland's manufacturing boom continued into August," the survey found, as demand for Irish goods "continued to improve markedly". 

Barometer to world economy

The monthly survey in Ireland is also closely watched by international analysts because the findings are some sort of barometer to the world economy because a large number of multinationals are based here producing for world markets and not local demand. 

Factories continued to hire in August, for the 11th month in a row for new jobs expansion.           

"Having expanded at a record rate in July, new orders continued to rise rapidly with the latest expansion the sixth-highest on record, albeit the softest since April. New export orders increased at the second-fastest rate since November 2017, with the UK, continental Europe, US, and Asia all reported as sources of growth," it said.  

Global shortages of almost any manufactured goods and disruption to supply chains as the world economy came out of the worst of Covid-19 restrictions also showed up in August's Irish survey but there may be signs that price pressures will ease, in time. 

"Input price inflation eased further from June's near-record high to a six-month low, but was still among the strongest ever recorded," the survey showed. 

"Meanwhile, the 12-month outlook for production remained upbeat, but it was not as high as the level recorded in July," said AIB chief economist Oliver Mangan.