Wholesale electricity prices up 303% - CSO

Factory gate prices showed an increase of 4.4%

Annual manufacturing prices increased by 4.4% in March, with wholesale energy products increasing by 227% compared to March last year, new figures from the Central Statistics Office (CSO) show.

This surge in energy costs is mainly driven by the strong price increase of electricity which have more than trebled in the past year.

Year on year, gas oil, other than auto diesel, increased by 46%. Other manufacturers are feeling the burden of increased prices as well. Reinforcing metal and rough timber prices increased annually by 55% and 46% respectively.

Manufacturers struggled as supply chain disruptions caused by the pandemic have been exacerbated by Russia's invasion of Ukraine and renewed lockdowns in China as well as high levels of inflation.

S&P Global’s Flash Composite Purchasing Managers’ Index for the eurozone, seen as a gauge of overall economic health, rose to 56 in April from 55 in March, confounding expectations in a Reuters poll for a fall to 54.

Any reading above 50 indicates growth.

“The detail showed this was driven entirely by the services component, but the manufacturing output PMI fell as supply constraints exacerbated by the Ukraine war and lockdowns in China took their toll, especially on the auto sector,” said Jessica Hinds at Capital Economics.

It was a similar story in Germany where the manufacturing sector saw much slower growth due to supply disruptions and a drop in new orders whereas the services sector of Europe’s biggest economy accelerated, earlier data showed.

Growth in demand for manufactured goods waned and the new orders index fell to 52 from 54, its lowest reading since around the time the pandemic was tightening its grip and indicating no imminent turnaround.

French business activity grew at the fastest pace in more than four years as the euro zone's second-biggest economy benefited from fewer Covid-19 restrictions, more job creation and higher orders.

Additional reporting Reuters