Irish manufacturing activity contracts slightly in November, PMI shows

(Reuters) - Ireland's manufacturing sector saw a slight downturn in November, with a survey on Monday showing a contraction in activity as new orders weakened.

The AIB Ireland Manufacturing PMI fell to 49.9 from 51.5 in October. A PMI reading above 50 indicates growth, while below that level signals a contraction.

This marks the third time in six months that the index has fallen below 50, highlighting ongoing challenges in the sector.

The decline was driven by a sharp drop in new orders, the steepest since June, with manufacturers citing fragile consumer demand and subdued global economic conditions.

Despite the overall contraction, production volumes increased for the fourth time in five months, reaching the fastest pace since February. Some firms attributed this to efforts to rebuild inventories.

Employment in the sector declined for the third consecutive month, with the rate of job shedding the quickest since June 2023. Companies often cited non-replacement of voluntary leavers due to sufficient capacity.

Input cost inflation eased to a five-month low, yet output charge inflation accelerated, reflecting efforts to pass on higher costs to customers.

"The rate of inflation for input costs eased for the second straight month. However, output charge inflation accelerated to its second-highest reading since March 2023," said David McNamara, AIB Chief Economist.

Looking ahead, manufacturers remain optimistic, AIB said, with 46% expecting output growth over the next 12 months, though optimism has moderated since October. Concerns about competitive pressures and the economic backdrop were noted by some firms.

(Editing by Toby Chopra)

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