Manufacturing loses momentum as bottlenecks constrain output
Irish factory activity lost some momentum in August with growth in output, new orders, exports and purchasing all lower than the previous month, a survey showed today.
The AIB IHS Markit manufacturing Purchasing Managers’ Index (PMI) stood at 62.8 in August.
This marked the fourth highest reading since the survey began in 1998 but lower than July’s 63.3, June’s 64, and May’s record of 64.1.
A reading above 50 denotes growth in the sector.
Backlogs increased at the highest level ever recorded, a sign that supply bottlenecks constrained output while stocks of unused inputs built-up at a record rate as firms reported shortages of key components.
“The sub-components of the Irish PMI survey showed that while the rates of growth slowed since July, they remained among the strongest ever registered,” AIB chief economist Oliver Mangan said.
“Output rose for a sixth consecutive month, with firms noting rising demand as markets continued to reopen,” he added.
But he said the survey showed capacity constraints in the sector, with another record increase in work backlogs that were attributed to a combination of demand pressures, supply chain delays and staff shortages.
“These factors contributed to ongoing upward pressure on both input and output prices,” he said.