Tue, 20 Apr 2021

Post-pandemic looks bright for manufacturing in Ireland

Robert Besser
04 Mar 2021, 18:32 GMT+10

DUBLIN, Ireland: Ireland's manufacturing sector grew slightly for the second consecutive month in February, after a major decline at the start of the year, as Brexit and a third coronavirus economic lockdown affected output and new orders.

The AIB IHS Markit Manufacturing Purchasing Managers' Index rose slightly from 51.8 to 52.0 in January, above the 50.0 benchmark separating expansion and contraction, but down considerably from December's figure of 57.2.

The previous month's numbers were still higher than the 36.0 recorded in April during the first lockdown. The manufacturing sector was allowed to operate in subsequent lockdowns.

Output and new orders fell for the second consecutive month, while supply chains remained under severe pressure, with the UK's exit from the European Union being widely cited as the major cause of related delays.

Rising administration and transport costs resulting from Brexit, as well as upward pressure on raw material prices, are also creating inflationary pressures, according to experts.

However, employment in the sector continued to rise and sentiments remained strong, as firms are looking beyond the crisis to a potential rise in demand later in the year.

"Tight COVID-19 lockdown restrictions, both here and elsewhere, are creating a challenging environment for businesses, with firms reporting weak demand and, therefore, fewer new orders in Ireland and from the UK," said Oliver Mangan, AIB Chief Economist, as quoted in Reuters.

"On a more positive note, firms expect the rollout of COVID-19 vaccines to improve economic conditions while lockdown restrictions are lifted during the year," he added.

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