Manufacturing confidence on the rise again, AIB survey shows
BUSINESS confidence in the manufacturing sector improved last month, as both new orders and output returned to growth.
The volume of new orders increased for the first time in three months, according to the latest AIB Manufacturing purchasing managers index (PMI).
The PMI is a single-figure gauge of how the manufacturing sector is performing. Last month the Manufacturing PMI recorded a reading of 52.2, up from 50.3 in October.
Any reading over 50 indicates growth.
News of potential vaccines for Covid-19 helped improve businesses confidence around higher output levels over the next 12 months.
Last month, the Future Output Index rose sharply and signalled the strongest industry sentiment since January.
Firms are hopeful of business levels returning to normal as countries learn to manage the coronavirus pandemic and introduce vaccination programmes.
“Firms are increasingly optimistic about the 12-month outlook for production. Sentiment rose strongly in November on the back of the positive news on Covid vaccines, reaching its highest level since January,” said AIB chief economist Oliver Mangan.
“Overall, the November PMI data show that, as in other countries, the sector is coping well with the second lockdown and is increasingly confident about prospects for 2021.”
The strength of Irish manufacturing PMIs mirrors that of the wider eurozone where German industry remains robust, although the services sector remains subject to economically damaging lockdowns and sentiment in that sector is weak.
The higher levels of new orders for the Irish manufacturing sector contributed to an increase in production during the month, following a stable trend in October. Output has now risen four times in the past six months.
Firms also increased their headcount, with back-to-back employment gains registered in the sector for the first time since August 2019.
With new orders rising in November, manufacturers expanded their purchasing activity for the first time in four months.
This contributed to the first rise in stocked inputs since October 2019.
In addition, the imminent end of the Brexit transition period has resulted in some stockpiling by firms.
Supply chains remained under pressure, with input delivery times rising and a quarter of manufacturers reporting delays.
The sector is coping well with the second lockdown