Key insights
- Irish manufacturing growth accelerated in March, but input cost inflation surged to a 39-month high. Manufacturers are passing on costs, but competition limits pricing power. Business activity expectations moderated due to concerns about the Middle East. While seemingly localized, persistent global inflationary pressures, especially in manufacturing, could influence the Fed's monetary policy decisions, indirectly impacting US equities negatively.
Investing.com -- Ireland’s manufacturing sector showed resilient growth in March, with output expanding at the fastest pace since July 2025, according to the AIB Ireland Manufacturing PMI released Wednesday.
The headline PMI rose to 53.7 in March from 53.1 in February, marking the highest reading since June 2025. Production volumes increased for the fifth consecutive month, driven by improved demand conditions and the strongest upturn in new orders in four months.
Export sales recorded a robust increase, the fastest since February 2022. Manufacturers reported rising demand from developed economies, particularly the UK.
Stronger demand led to a modest rise in unfinished work, the steepest accumulation in 13 months. Employment increased solidly, with the rate of job creation easing only slightly from February’s 44-month high.
Supply chain challenges continued, with delivery times lengthening for the eleventh successive month due to international shipping delays. Concerns about transportation delays and future price increases prompted manufacturers to advance raw material purchases, with input buying expanding at the greatest extent since June 2025.
Input cost inflation surged to a 39-month high, with around 42% of surveyed firms reporting higher input prices. Manufacturers cited increased costs for energy, fuel, metals and polymers.
Factory gate prices rose at the sharpest rate since September 2024 as manufacturers passed on higher fuel and raw material costs, though intense competition limited pricing power.
Business activity expectations for the year ahead remained positive but moderated for the second consecutive month to the lowest since July 2025.
Around 44% of manufacturers predicted an increase in output over the next year, while 10% forecast a reduction. Several firms noted the war in the Middle East would adversely impact customer demand and growth prospects.
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