Manufacturing growth slowed to its lowest rate in two and a half years in April when new orders weakened, a survey showed today, as a slowdown in global markets hit the euro zone's fastest-growing economy.
The Investec Manufacturing Purchasing Managers' Index fell to 52.6 in April from an eight-month high of 54.9 in March. It was the weakest reading since November 2013.
But the index still remains above the 50 line that separates growth from contraction for a 35th month in a row.
Investecs said poor growth in orders was driven by a weakening of demand in international markets, with new export orders reaching a 34-month low.
Manufacturing employment continued to grow in April, but at the lowest rate in 2016 so far, the survey showed.
"We think Q2 is likely to prove to be a tricky period for many Irish manufacturing firms ahead of June's EU referendum in the UK, the destination for roughly one-seventh of Irish merchandise exports," Philip O'Sullivan, chief economist at Investec Ireland, said.
"Firms should give careful consideration to strategies designed to provide some protection in the event of further sharp moves in the currency and/or commodity markets," he cautioned.
Today's index shows that input costs fell for the eighth month in a row, led by weaker raw material costs.
However Investec said that some companies reported signs of inflationary pressures returning.
It also said that at least some of the benefit from the weaker input costs was passed on to customers, as output prices fell for a fourth successive month.
