Strong exports and new orders help manufacturing output rebound in February

Latest AIB Manufacturing PMI shows gains in output, new orders, and employment

Irish manufacturing output reached its highest rate in seven months during February, according to the latest AIB Manufacturing purchasing managers’ index, with strong exports boosting growth.

Irish manufacturing output reached its highest rate in seven months during February, according to the latest AIB Manufacturing purchasing managers’ index, with strong exports boosting growth.

Data for February showed a rebound in manufacturing output growth to its highest level since July 2025, supported by a moderate rise in new work and additional staff recruitment. “The expansion in February was due to sustained gains in output, new orders, and employment,” said AIB chief economist David McNamara.

Exports markets were a source of order book expansion as total new business from abroad improved for the first time in three months and to the greatest extent since March 2025.

“Output rose robustly in February, accelerating from the pace observed in January, with respondents citing improved demand conditions. This was also evident in growth new orders and a renewed rise in export orders, following two months of contraction. Firms cited better demand in Asia, the UK and US," said AIB chief economist David McNamara. 

"Given the improving backdrop, hiring accelerated to the fastest rate since June 2022, as plans for expansion spurred a rise in employment. Moreover, purchasing activity by firms also rose solidly, pointing to optimism for the year ahead.” 

Supply chain delays and higher purchasing prices challenged growth, with the rate of cost inflation hitting a 37-month high, the PMI said. Some manufacturers noted intense competitive pressures and difficulties arising from elevated cost inflation, while supply chain delays limited scope to reduce unfinished business.

Vendor performance deteriorated for the 10th month running.

“While activity levels improved, the rate of input inflation accelerated sharply in February to the highest level since January 2023,” said Mr McNamara. “Respondents noted some raw materials costs had materially escalated. Nonetheless, with demand strong, firms were able to increase output prices to somewhat protect margins, albeit competition had limited the ability to pass on all costs increases."

The headline AIB Manufacturing PMI is a composite single-figure indicator of manufacturing performance derived from indicators for new orders, output, employment, suppliers’ delivery times, and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of the sector. At 53.1 in February, up from 52.2 in January, the seasonally adjusted AIB Ireland Manufacturing PMI reached its highest level since July 2025 “The Irish manufacturing PMI remains above the flash February readings for the Eurozone, US and UK at 50.8, 51.2, and 52.0, respectively,” said Mr McNamara.