DUBLIN – Irish factory activity hovered near recent record levels in July as a new high in the growth of new orders was tempered only by rising backlogs and higher input prices as a result of ongoing supply shortages, a survey showed on Tuesday.
The AIBIHS Markit manufacturing Purchasing Managers’ Index (PMI) fell a touch to 63.3 in July from June’s 64.0 and the 64.1 in May that represented the highest level since the survey began in 1998. A reading above 50.0 denotes growth in the sector.
The index has remained above 60 for four straight months and is broadly in line with strong flash PMIs in the neighbouring United Kingdom, the euro zone as a whole and the United States.
Amid the rapid pace of growth in activity however, the survey’s authors said capacity constraints remained very much in evidence last month.
Global raw material shortages and shipping bottlenecks contributed to input delivery times continuing to lengthen at one of the most marked rates on record, while Brexit-related customs issues were also reported.
Input prices rose at the third highest rate ever in July, with manufacturers continuing to pass on the higher costs to customers as output price inflation set a fresh record for the fourth successive month.
Purchasing activity also expanded at a record pace, which the survey’s authors attributed to firms building safety stocks in expectation of future price increases and shortages.