Manufacturing bounces back to pre-pandemic growth rate – PMI

The manufacturing sector returned to growth in June after recovering almost all of the sudden deterioration seen following the coronavirus-related shutdown of most of the economy in March, a survey showed today. 

The economy here has opened more gradually than much of Europe with large parts of the services sector including hotels, restaurants, hairdressers and most pubs only resuming trading this week.

A number of factories here reopened in June, the AIB IHS Markit manufacturing Purchasing Managers’ Index (PMI) survey found.

That helped push the index up to 51 from 39.2 in May, back above the 50 mark denoting growth. 

The record one-month gain was driven by a near doubling in the largest sub indices of new orders and output, with exports also rising at the fastest level since April 2019. 

The main index hit a low of 36 in April and stood at 51.2 in February before Ireland reported its first coronavirus case on February 29. 

Flash sister surveys in June for the UK and the euro zone as a whole showed similar rebounds to 50.1 and 46.9 respectively. 

However higher production was not matched by a rise in employment in June, with one in five firms cutting staff, albeit down from 29% in May and 41% in April, the survey showed. 

CSO figures yesterday showed that 22.5% of the workforce here were either temporarily or permanently unemployed at the end of June, down from a record 28.2% in April.

AIB’s chief economist Oliver Mangan said the return to growth was a clear indication of improving economic conditions but that many of the indices remained weak relative to their long-run averages. 

“Manufacturing conditions have not returned to normal. The collapse in orders in the March-May period means that backlogs continued to fall sharply, while inventories of finished goods shrunk further, with stocks of inputs also still in marked decline,” he said.

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