Ireland’s manufacturing sector roared to its fastest growth in a year last month, driven by a surge in new orders and ramped-up production, according to the latest AIB and S&P Global survey.

The AIB Ireland Manufacturing PMI climbed to 51.9 in February, up from 51.3 in January, marking its highest level in 12 months and reinforcing a second consecutive month of expansion.

One of the standout trends? New orders saw their sharpest rise since May 2022, buoyed by strong domestic demand. However, export sales remained flat, reflecting softer external demand—particularly from Europe.

“Output rose robustly in February amid a general improvement in demand conditions,”

Noted AIB chief economist David McNamara. But he cautioned that external demand remains weak, posing a challenge for export-led growth.

Despite this, the sector continued to add jobs for the third straight month, though at a slower pace than in January. Meanwhile, backlogs of work piled up at the fastest rate since April 2022, as supply chain delays kept firms waiting longer for raw materials.

But there’s a catch: Inflationary pressures are mounting. Input costs surged to a two-year high, fueled by rising raw material prices and wage increases. In response, manufacturers hiked output prices at the fastest rate since September 2024, balancing margin protection against competitive pressures.

Looking ahead, around 40% of manufacturers expect output to rise over the next year, though confidence has dipped to its lowest since September 2024 amid concerns about the global economic outlook.

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Originally Posted by RTE