Manufacturing activity shrank at its fastest pace in three years in May on sharp falls in output and new orders that reflected contractions in its global peers' markets, a survey showed today.
The AIB S&P Global manufacturing Purchasing Managers' Index (PMI) fell to 47.5 from 48.6 in April.
It held below the 50 line separating expansion from contraction for the third successive month.
"The downturn in global manufacturing stems from weak demand, with declining new orders, falling production and a rundown of inventories. These traits are very evident in the latest Irish data," AIB's chief economist Oliver Mangan said.
May saw further declines in new orders, particularly export orders, the survey's authors said. Spare capacity rose further while stocks of finished goods fell.
Employment, however, increased for a sixth month while the survey found an easing of inflationary pressures in the sector.
AIB noted that input prices fell for the second consecutive month amid a continuing moderation in raw material and energy prices, which led to the first fall in output prices since September 2020.
There was also a further shortening in supplier delivery times, with the easing of pressures on supply chains being aided by the general weakness of demand.
Irish manufacturers continue to be optimistic about the future, although confidence levels remain low by historical norms, today's index also shows.
Oliver Mangan said the drop in activity comes as no surprise as manufacturing activity globally remains in contraction, with the pace of decline gathering momentum.
"The flash May Manufacturing PMIs for the euro zone, UK and US slipped further to 44.6, 46.9 and 48.5, respectively," he noted.
