News Business Manufacturing Activity Deteriorates: New Orders Fall
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Purchasing Managers' Index

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Manufacturing Activity Deteriorates: New Orders Fall

By Gill Stedman

Published on May 1, 2024

Activity in the manufacturing sector deteriorated in April, according to the latest AIB Purchasing Managers Index. Let's delve into the details:

Key Findings

The headline index dropped from 49.6 in March to 47.6. Readings above 50 indicate overall growth in activity.

The decline reflects underlying weakness in output, new orders, and hiring trends in the sector last month.

Output and New Orders

The output index declined for a second consecutive month, reaching its lowest level since October 2023. A generally weaker demand environment, including from clients in the construction sector, contributed to this decline.

New orders were also sharply lower due to softer domestic and export demand. The rate of decline in new orders was the fastest since December 2022.

Staffing and Input Buying

Staffing numbers stagnated across the manufacturing sector, ending a three-month period of marginal jobs growth. Hiring was constrained by a lack of pressure on operating capacity.

Input buying fell for the first time since January, reflecting weak order books and efforts to streamline inventories.

Inflation and Outlook

Input price inflation eased sharply in April to a three-month low, attributed to cheaper raw material costs. Surprisingly, output price inflation accelerated despite declining demand, indicating lingering pricing power within the sector.

Looking ahead, companies remain somewhat positive about the next 12 months. The Business Expectations Index jumped sharply from the 41-month low recorded in March. Almost half of respondents expect a rise in output volumes during the next year.

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