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Irish Independent

Manufacturing down almost 14pc in April as fears ease over tariffs

The 13.7pc fall in production indicates that the frontloading of exports in America in advance of Mr Trump's tariffs subsided after the US president unveiled a series of reciprocal tariffs on April 2 only to postpone them a week later. There is now a 10pc tariff in place on imports, but pharma products are not included. The Central Statistics Office (CSO) said the 13.7pc decline was concentrated in what it calls the 'modern' sector. Colin Cotter, a statistician in the enterprise division, said: 'The highly globalised modern sector, which includes the chemical, pharmaceutical, and computer and electronic sectors, experienced a growth of 41.8pc in industrial production from February to April, when compared with the same period in 2024. 'In contrast, the 'traditional' sector declined by 0.7pc over the same three-month period. In general, it should be noted that the results reflect contract manufacturing activity in the multinational sectors.' Over the three months from February to April, production in manufacturing industries was 35.6pc higher compared to the same period last year. The prospect of Trump tariffs has led to a distortion in many economic indices, which is likely to continue for the rest of the year, even if the US and EU agree a new trade deal. Last week, the CSO published data showing that Irish GDP expanded by 9.7pc in the first three months of the year, one of the biggest increases ever recorded. The statistics agency said the increase was due to a significant growth in export of goods. Irish exports hit a record level of €37.3bn in March, as US companies packed their warehouses in advance of Mr Trump's threatened tariffs. Exports to America were up by €20.3bn that month alone, or 395pc, reaching a total of €25.4bn. The stockpiling was most obvious in pharma, which remains under the threat of a sectoral specific tariff of up to 25pc. ADVERTISEMENT Exports of medical and pharma products, most of them produced in Ireland, increased by €16.7bn or 243pc that month. This would have included the active pharmaceutical ingredient in Mounjaro, the weight-loss drug produced by Eli Lilly, which employs more than 3,500 people here. All of the figures are likely to unwind over the second half of the year, with the manufacturing statistics for April just the first in a series of decreases. The most recent monthly purchasing managers' index (PMI) for Irish manufacturers did record a robust increase in output volumes during May, extending the current period of growth to five months. Some firms reported subdued spending by American clients, however, though the survey suggested that concerns about the impact of tariffs eased in May. The EU recently won a reprieve from a threat of 50pc tariffs made by Mr Trump, after he spoke to European Commission president Ursula von der Leyen by phone. A July 9 deadline for US-EU negotiations to secure a trade deal was reinstated. But sources have been reported as saying little progress has been made, with the US pushing for concessions the EU is unwilling to make.