Irish factory output dented by Storm Emma
Irish factories still extended a winning run despite the huge disruption to work and transport that Storm Emma visited on the country last month.
However, the Investec Ireland Purchasing Managers Index (PMI) survey showed the rate of growth fell back to its lowest for any month in the past year.
Demand from the rest of the eurozone, in particular, helped boost new orders in the month, according to the survey.
The cost of materials rose, however, particularly for steel, helping to dent profitability of manufacturers in the month though they remained upbeat about the outlook.
“Given the generally supportive international backdrop we view this optimism as well-founded,” said Investec Ireland chief economist Philip O’Sullivan, saying that April’s report would likely post increases.
Elsewhere in the eurozone and in the UK, manufacturing boom stumbled in March as optimism waned and demand ebbed owing to Storm Emma, but expansion was still broad-based across the Continent.
The UK, deep in negotiations to leave the EU, saw manufacturing growth cool to a year low in the first quarter of 2018, but a survey there suggested the economy is on a slow but steady course a year ahead of Brexit.
The March survey showed growth in cost pressures for UK factories and their selling prices cooled, something that may reassure Bank of England officials who are keeping an eye on inflation pressures.
IHS Markit’s final manufacturing PMI for the eurozone sank to an eight-month low in line with an earlier flash estimate and still comfortably above the 50 mark that separates growth from contraction.
Eurozone economic growth has already peaked, a Reuters poll found last month, but the ECB will probably decide this summer to slash its bond purchases if things develop as expected, policymaker Ewald Nowotny said last week.
“Clearly, the big question remains what the PMI will do next: The level is still good but the trajectory needs to stabilise in April,” said Greg Fuzesi at JP Morgan.
The UK’s PMI inched up to 55.1 in March from a downwardly revised 55 in February, beating the consensus in a poll of economists.
“March’s heavy snowfall doesn’t appear to have had a particularly severe impact on supply chains,” said Ruth Gregory at Capital Economics.
- Additional reporting Reuters
