DUBLIN, Ireland: As inflation caused prices for factory materials to rise, Ireland's factory output fell in September, causing an easing of supply chain shortages.
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).
"The Irish data for September was a bit of a mixed bag. New orders, including export orders, fell for a fourth consecutive month, a worrying sign reflective of weakening demand in the face of rising price pressures," AIB's chief economist Oliver Mangan said, as reported by the Irish Examiner.
However, added Mangan, factory output only saw a slight drop, as backlogs were cleared and stocks of finished goods were rebuilt.
Experts noted that lower demand for factory goods was due to caution displayed by customers to spend less during uncertain times.
"Input costs continued to rise sharply, though the rate of increase slowed further to a 19-month low," noted Mangan.
While the cost of factory-made products remains high, it has eased significantly from earlier in 2022, even as delivery delays again caused prices to rise.
Meanwhile, some factories have had success in holding down prices by purchasing materials in bulk.
The all-important PMI was posted at 51.5 in September, up from 51.1 in August. When the PMI falls below 50 it indicates that output contracted in the month.
Still, business in Ireland remains healthier than reports coming from the UK and Europe, as the September manufacturing PMI for the UK and the eurozone has reportedly fallen to 48.5.