Rise in manufacturing input costs remains 'intense'         

'Companies widely reported passing on higher costs to customers,' the latest AIB Purchasing Managers’ Index reported.

Oil and gas prices have climbed, adding to manufacturing costs and consumer prices. Picture: Larry Cummins

The rise in the cost of raw materials used by Irish factories continued to be “intense” in February, and the costs are being passed on to customers, according to the latest AIB Purchasing Managers’ Index (PMI).

The report confirms that inflation pressures were building for Irish factories even before the latest developments in the Ukraine conflict that sent the cost of energy and commodities rising again.

Input costs were close to record high levels, as “raw materials, energy, packaging, electronic chips, Brexit, and transport charges were all widely reported by panellists as drivers of the latest rise”, the survey found.

“Companies widely reported passing on higher costs to customers,” according to the survey. 

However, the overall picture for Irish manufacturing remains healthy.

While the headline index did fall back to 57.8 from 59.4 in January, hitting an 11-month low, this is still an elevated level historically,” said Oliver Mangan, chief economist at AIB.

Any reading above 50 in the Irish and the international PMI surveys suggest that factory output expanded rather than stagnated or declined in the month.

The Irish survey is one of many taken every month across many countries. The Irish survey is closely watched because so many multinational manufacturers are based here.