Growth in Ireland’s manufacturing sector in April slowed to its weakest rate since November 2013, with growth in new orders moderating to a 29-month low.

Investec’s Manufacturing PMI Ireland for April came in at 52.6, down from March’s 54.9 reading.

Investec said that the sluggishness in new orders is most acute in the export sector, where new export orders expanded only slightly in the month amid a general weakening in demand in international markets.

On the margin side, input costs fell for the eighth month in a row, led by weaker raw material costs, while some of Investec’s panellists reported signs of inflationary pressures returning. Some of the benefit from the weaker input costs in April was passed on to end-customers, as output prices fell for a fourth successive month.

Investec economist Philip O’Sullivan also noted that, while the rate of expansion in the employment index has slowed through April to its weakest seen in 2016 so far, the ongoing increase in hiring activity suggested that Irish manufacturing firms expect that the current softness in new orders may not endure.

In Association with

Tricky

“With that being said, we think Q2 is likely to prove to be a tricky period for many Irish manufacturing firms ahead of June’s EU referendum in the UK (the destination for roughly one-seventh of Irish merchandise exports),” O’Sullivan added.

“In this regard, firms should give careful consideration to strategies designed to provide some protection in the event of further sharp moves in the currency and/or commodity markets.”