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(Alliance News) – Ireland’s manufacturing sector conditions improved only slightly in October as output stagnated amid subdued demand, S&P Global reported Monday.

The AIB Ireland manufacturing purchasing managers’ index fell to 50.9 in October, down from 51.8 in September.

A reading above the 50.0 neutral mark indicates an overall increase in business activity from the previous month, while a reading below signals a contraction.

The latest figure marked the weakest improvement in the manufacturing sector since the current period of expansion began in January, with S&P Global reporting a decline across all five PMI sub-components.

David McNamara, AIB chief economist, said: “The modest improvement in manufacturing conditions in October was driven by gains in new orders and employment, while output growth stalled and inventories decreased more quickly.

“Output stagnated in October, with respondents citing subdued demand conditions. This was also reflected in the continued fall in export orders, albeit total new orders continued to expand at a marginal pace. Respondents cited weakness in European export markets as the key driver of the fall in export orders.”

Input cost inflation decelerated to the lowest level seen in 17 months as raw material prices fell.

Meanwhile, despite employment growth continuing for the eleventh month in a row, some firms noted staff shortages and faced difficulties when finding candidates with sufficient skills.

S&P Global revealed that manufacturers are confident that production will increase in the next 12 months, with 45% of survey respondents foreseeing an expansion in output, with only 9% expecting a decline.

“That said, the overall degree of optimism was the lowest recorded since July. New product launches and entry into new overseas markets were cited as growth drivers over the year ahead, while some firms also commented on hopes of a turnaround in sluggish global economic conditions,” S&P Global said.

S&P Global compiles the PMI each month using survey responses from a panel of around 250 manufacturers.

By Elijah Dale, Alliance News senior reporter Asia-Pacific

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