Irish Factory Activity Remains Stable in January

The AIB Ireland Manufacturing PMI stood at 52.2 in January 2026, unchanged from December 2025, marking the 13th consecutive month of expansion, driven by sustained gains in output, new orders, and employment. Output grew at the slowest pace in three months due to lacklustre foreign sales amid economic uncertainty. Meanwhile, a faster upturn in employment and renewed inventory accumulation offset the impact of weaker expansion in output and new business. Purchasing activity rose at the fastest pace since June 2025, while delivery times deteriorated to the greatest extent since May 2025 amid ongoing transportation delays. On prices, input cost inflation accelerated to the highest level in three years, driven by higher raw material prices and rising wage costs. As a result, selling prices rose, albeit to a much lesser extent than input costs. Finally, sentiment improved to the highest level in nearly two-and-a-half years, amid hopes of improving global demand conditions.

The AIB Ireland Manufacturing PMI fell to 52.2 in December 2025 from 52.8 in November, but stayed above the 50 threshold for the twelfth straight month, signaling a continued expansion in manufacturing conditions. Output growth was sustained for a second month, though the pace of expansion eased from November’s four-month high. New business rose only marginally as weaker export demand and intense competition weighed on overall order growth. Employment stood out as a key positive, with manufacturers increasing staffing for the thirteenth month running and at a faster pace, helping to reduce backlogs further. Purchasing activity also remained expansionary but slowed to its weakest in four months. On prices, input cost inflation accelerated to its fastest pace since July, while output price inflation eased to its weakest since May 2024. Looking ahead, manufacturers remained optimistic about output growth in 2026, although business sentiment softened slightly from November’s 11-month high.

The AIB Ireland Manufacturing PMI increased to 52.8 in November 2025 from 50.9 in October, marking the fastest expansion since July. The rise was supported by a strong increase in new orders, driven by a fresh rise in export sales, while production posted renewed growth, the first increase in four months. Purchasing activity also rose, following sharp declines in prior months, while suppliers’ delivery times lengthened for the seventh consecutive month. Meanwhile, employment continued to decline, and backlogs of work increased for the first time in four months. On prices, input cost inflation accelerated, and output prices rose as firms passed higher costs on to their clients, though inflation eased slightly. Looking ahead, business sentiment improved to an 11-month high, supported by hopes of stronger demand conditions.