DUBLIN (Reuters) - Irish factory activity shrank for the third successive month in August and at a similar pace to July as a global manufacturing slowdown and Brexit uncertainty continued to weigh on demand, a survey showed on Monday.
The recent dip in activity in the sector is the first since a near identical three-month downturn in early 2013, just before Ireland's economy began its run as the EU's best performer for each of the last five years.
The economy has managed to weather the uncertainty created by the June 2016 vote by Britain, its near neighbour and close trading partner, to leave the EU, although data last week showed some moderation in the rapid pace of jobs growth.
The AIB IHS Markit manufacturing purchasing managers index (PMI) edged slightly lower to 48.6 in August from 48.7 in July, remaining below the 50 mark that separates growth from contraction.
While the contraction in output and new export orders was not as sharp as July, pre-production inventories fell for the first time in a year to 48.0 from 50.8 in the previous month, with panellists citing weaker demand conditions.
The sub-index measuring stocks of purchases had hit its highest level in the 21-year history of the survey in March, as manufacturers stockpiled ahead of the then March 31 Brexit deadline that has since been extended to Oct. 31.
"Irish manufacturing activity has been hit by a double whammy of global weakness in the sector and Brexit uncertainty It is unlikely to pick up until these headwinds subside," said AIB Chief Economist Oliver Mangan.
"However, output could be boosted in the next couple of months if firms start to stock pile ahead of the latest Brexit cliff-edge date of end October."
(Reporting by Padraic Halpin; Editing by Toby Chopra)
