Irish manufacturing expands in May, outperforming Europe, the US and the UK

Irish Examiner

2 days ago

Irish manufacturing output recorded another month of robust growth in May, with output volumes increasing for a fifth consecutive month.
A solid rise in total new work, along with improving domestic demand, helped to offset weaker export order books.
The AIB Irish Manufacturing PMI came in at 52.6 in May, down slightly from 53.0 in April but above the 50.0 mark, indicating output growth. The figure is derived from indicators for new orders, output, employment, suppliers' delivery times and stocks of purchases.
The survey of 250 Irish manufacturing firms across the country also resulted in a stronger reading than the Eurozone, the US and the UK.
According to the survey, some Irish firms noted subdued spending by US clients, suggesting concerns about the impact of tariffs and global trade tensions had eased in May. As a result, business activity expectations for the year ahead recovered from April's eight-month low and staff hiring edged up to its fastest since January.
Export sales remained a weak spot in May, with total new work from abroad decreasing for the second month running. The pace of the contraction accelerated to its fastest since December 2024. Goods producers noted subdued spending by US and UK clients, linked to elevated global economic uncertainty.
Survey respondents commented on resilient demand conditions, improving sales pipelines and the impact of long-term business development plans.
"Output rose strongly in May, amid a general rebound in domestic demand conditions," AIB's Chief Economist, David McNamara, said. "This was reflected in robust growth in new orders. Nonetheless, some respondents noted weak US and UK demand, dragging down export orders, for a second consecutive month. Employment expanded, with the pace of hiring picking up as firms reacted to rising workloads."
Cost pressures continued in May, despite the rate of input price inflation easing from April's 26-month high. A number of firms noted rising prices paid for agricultural commodities and other raw materials. Some manufacturers suggested that exchange rate appreciation against the US dollar had helped to limit price pressures from imported items.
The survey of Irish firms found backlogs of work decreased for the third month running. Improving order books and new projects spurred a sustained upturn in staff recruitment. The rate of job creation edged up to its fastest since January.
Greater employment numbers also reflected an improvement in optimism levels, recovering from the eight-month low seen in April amid fewer comments from survey respondents about the likely impact of US tariffs on business prospects.
"Despite ongoing geopolitical and tariff uncertainty, Irish manufacturers maintained a generally upbeat assessment of the outlook for activity levels over the coming year. Around 39% of the respondents predict a rise in output levels during the year ahead, while 9% expect a decline," Mr McNamara said.