Easing cost pressures give manufacturers a little breathing room – PMI
The pace of increase in input and output costs for manufacturers here eased to the lowest level in months in August, offering some slight relief to firms who could only eke out modest growth overall.
The AIB S&P Global manufacturing Purchasing Managers’ Index (PMI) fell to 51.1 in August from 51.8 in July, the lowest reading in almost two years.
But unlike flash data for the euro zone as a whole, it remained above the 50 mark separating growth from contraction.
Much weaker readings have been seen in the rest of Europe for August, with the flash Manufacturing PMI moving down to 49.7 in the euro zone and falling sharply to 46 in the UK.
The fall here was driven by a third monthly contraction in output in a row, where the rate of decline was the fastest in 18 months.
Backlogs of work and new export orders also declined at a faster rate last month.
Firms attributed lower output to a drop-off in demand that was partly linked to high inflation deterring new customers, the survey’s authors said.
While cost pressures remained among the highest levels seen in the series’ 20-year history, the reading for input prices fell to 75.7 from 82.6 in July and helped bring the output prices subindex down to 66.5 from 71 the previous month.
Supply chain pressures also remained intense, although the overall incidence of delays in delivery times was the lowest since November 2020.
“While inflationary pressures remain strong, there are signs that they are beginning to slacken,” AIB’s chief economist Oliver Mangan said.
“Input costs continued to rise sharply, but at the slowest pace in a year. This helped output price inflation ease to a seven-month low, though it still remains elevated,” he added.