Ireland’s manufacturing activity contracted for the first time since the first lockdown in May 2020, as a slump in demand led to a renewed fall in output, survey results from S&P Global showed on Thursday.
The AIB Ireland manufacturing Purchasing Managers’ Index dropped marginally to 48.7 in November from 51.4 in October. Any reading above 50.0 indicates contraction in the sector.
The new business volume declined for the sixth consecutive month, the longest sequence of contraction in over 13 years.
Pessimism about a potential recession, high inflation, and previous overstocking from clients contributed to weak demand conditions in November.
Without considering the pandemic, the rate of fall in output was the steepest decline in production since August 2009.
On the price front, cost inflation moderated to a 21-month low, though it remained elevated overall, reflecting high energy and raw material prices. Output price inflation was also the slowest in twenty months.
The production outlook in the next twelve months remained positive in November, but was the joint-lowest in over two years as firms highlighted the rising risk of recession and high inflation.