DUBLIN (Reuters) - Irish manufacturing activity eked out growth in January after two months of contraction, boosting confidence in the sector as cost pressures also eased markedly, a survey showed on Wednesday.
The AIB S&P Global (NYSE:SPGI) manufacturing Purchasing Managers' Index (PMI) rose to 50.1 from 48.7 in December. The November-December contraction was the first time the index slipped below the 50 line denoting expansion since May 2020.
While new orders contracted for the eighth successive month in January, they did so at a much slower rate than at the end of last year as firms cleared outstanding workloads and stocks of finished goods recorded their second biggest increase in the survey's history.
"There were a number of quite positive features in the January survey," AIB's chief economist Oliver Mangan said.
"Employment expanded at a solid pace, while there was a shortening of suppliers deliver times, the first seen since October 2019 in a clear sign that pressures on supply chains have eased considerably."
As a result confidence among manufacturers rose to a near one-year high while inflationary pressures cooled again with the rates of input cost and output price inflation sinking to 24- and 22-month lows respectively.
While rates were stronger than their historical averages in both cases, the sub index for input costs has now fallen back to 64.5 from the record high of 92.7 last March.