Ireland's manufacturing sector experiences the strongest improvement in seven months

Investing.com – Ireland’s manufacturing sector gained momentum in February, with AIB Ireland Manufacturing PMI rising from 52.2 in January to 53.1, marking the strongest improvement in business conditions since July 2025, according to data released on Monday.

The PMI reading, which measures overall manufacturing performance, remained above the 50.0 threshold that indicates expansion. The improvement was driven by stronger growth in output, new orders, and employment, although a slight decline in purchasing inventories weighed on the overall index.

Manufacturing output grew at the fastest pace in seven months in February. Respondents attributed the growth to improved demand conditions, especially from global markets. The sector has recorded higher production levels since November 2025.

Total new orders expanded modestly, with the rate of growth accelerating from the five-month low seen in January. Export sales recovered for the first time in three months, posting the fastest growth since March 2025. Despite intense competition and rising costs due to inflation, manufacturers reported improved orders from clients in Asia, the UK, and the US.

Employment in the sector grew at the strongest rate since June 2022, as manufacturers sought to increase capacity to handle higher workloads. Backlogs of orders decreased for the third consecutive month, though the decline was modest, with some manufacturers citing supply chain delays as limiting their ability to reduce unfinished work.

Supplier performance deteriorated for the tenth consecutive month in February, with delivery times lengthening to the greatest extent since November 2022. Respondents reported issues such as transportation delays, depleted inventories, and shortages of supplier personnel.

Input purchases by goods producers increased significantly, maintaining a high expansion rate for the seventh month in a row since January. However, due to supply chain delays causing unexpected inventory reductions, procurement inventories declined.

Purchasing prices rose sharply in February, with input cost inflation accelerating to the fastest pace since January 2023. Manufacturers cited rising prices for copper, steel, and precious metals, as well as high energy costs. Factory gate prices increased at a moderate pace, slower than in January.

About 46% of surveyed manufacturers expect production to expand over the next year, while 7% anticipate a decline. The index derived from these responses indicates strong business optimism, though not as optimistic as in early 2026. Manufacturers cited improved customer demand forecasts and expansion plans in export markets as factors supporting business confidence.

Ireland’s manufacturing PMI outperformed the Eurozone (50.8), the US (51.2), and the UK (52.0) in February.

Data was collected from February 10-20, 2026, through survey responses from approximately 250 manufacturing purchasing managers.

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