The manufacturing sector continued to grow at a rapid pace in July, albeit at a slower pace than the previous two months.
According to AIB’s latest monthly monitoring of conditions in the manufacturing sector, growth in new orders has reached a new record for the third consecutive month.
Production, although increasing, was partly constrained by persistent supply shortages.
This had an impact on cost pressures, which were described as remaining “severe”.
Producer price inflation has increased at a record pace, according to the report.
AIB’s Purchasing Managers Index (PMI) is a single-digit composite indicator of performance in the manufacturing sector.
Any number above 50 indicates an expansion in the sector while any number below this threshold indicates a contraction.
July’s figure came in at 63.3, up from 64 in June and 64.1 in May – an all-time high in measurement.
Inflationary pressures remain
The level of new orders continued to explode in July, with the expansion rate setting a new survey record for the third consecutive month.
Shortages of raw materials and insufficient shipping capacities continued to drive up input prices.
The inflation rate eased from the near-record pace in June, but was still the third highest in survey history as manufacturers continued to pass higher prices on to customers.
âAmid the rapid pace of growth in manufacturing activity, capacity constraints have remained very present. This has been reflected in a new record rate of increase in backlogs, with supply shortages contributing to the difficulties companies face, âsaid the chief economist of AIB.
âIrish data remains broadly in line with the strong PMIs of some of the major advanced economies. UK, Eurozone and US flash readings of 60.4, 62.6 and 63.1 respectively provide evidence additional support for the upward momentum in the sector, âhe added. added.