Snow disruption impacts manufacturing sector in Ireland in March
Staff Writer |
Disruption caused by Storm Emma at the start of March impacted business conditions in the manufacturing sector in Ireland during the month.
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Output rose only marginally and firms were forced to use buffer stocks to help meet demand.
New orders continued to rise sharply, however, as did employment, while business confidence data remained elevated.
The seasonally adjusted Investec Purchasing Managers’ Index (PMI ) – an indicator designed to provide a single-figure measure of the health of the manufacturing industry – dipped to 54.1 in March from 56.2 in February.
Although continuing to signal a solid monthly strengthening of the health of the sector, the rate of improvement eased to the weakest for a year.
Central to the weaker improvement in business conditions was a much slower rise in manufacturing output during the month.
Production increased only marginally, and at the weakest pace since August 2016.
Anecdotal evidence overwhelmingly linked the slowdown in output growth to snow disruption caused by Storm Emma.
The rate of expansion in new orders also eased in March, but only marginally.
Total new business continued to rise sharply amid generally improving market conditions.
A marked increase in new export orders was also recorded.
With new orders continuing to increase sharply, but production lines affected by the severe weather, manufacturers noted an increase in backlogs of work.
Moreover, the rate of accumulation was the fastest since December 2016.
With firms struggling to fulfil new orders through production, they were forced to eat into buffer stocks.
As a result, post-production inventories decreased steeply, and to the greatest extent in just over six years.
Suppliers’ delivery times were also impacted by the snow in March.
Lead times lengthened at a sharp pace overall, with supply chains already under pressure as a result of increasing demand for inputs.
Purchasing activity rose solidly, and at the same pace as in February, in line with higher new orders.
Meanwhile, stocks of purchases were broadly unchanged.
New order growth also led to a further marked increase in staffing levels, extending the current sequence of job creation to a year-and-a-half.
Input prices continued to rise sharply in March, despite the rate of inflation easing for the second month running.
Panellists reported higher costs for raw materials, in particular steel.
Firms raised their output prices accordingly, resulting in the fastest increase in charges since August 2017.
Planned new product launches and predictions of rising new business supported continued confidence among manufacturers that output will increase over the coming year. ■
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