Inflation forces Ireland to fall in September

Ireland: Inflation caused prices for factory materials to rise, Ireland's factory output fell in September, causing an easing of supply chain shortages.

The September data for September saw the greatest decline in new orders since January 2021, as high prices caused demand to fall, according to Allied Irish Banks' latest purchasing managers index PMI. AIB chief economist Oliver Mangan said that new orders, including export orders, fell for a fourth month, a worrying sign of weakening demand in the face of rising price pressures.

Mangan, factory output saw only a slight drop, as backlogs were cleared and stocks of finished goods were rebuilt.

The caution displayed by customers to spend less during uncertain times resulted in lower demand for factory goods, according to experts.

Input costs went up sharply, though the rate of increase slowed further to a 19 month low, noted Mangan.

Even as delivery delays caused prices to rise, the cost of factory-made products has gone up significantly from earlier in the year 2022, although it has been reduced significantly from earlier in the year.

Some factories have succeeded in holding down prices by purchasing materials in bulk.

The PMI was 51.5 in September, up from 51.1 in August. If the PMI falls below 50 it indicates that output contracted in the month.

The September manufacturing PMI for the UK and the eurozone has fallen to 48.5, as business in Ireland remains healthy, despite reports from the UK and Europe.