U.S. markets closed

Irish manufacturing industry stockpiling surges ahead of Brexit

Edmund Heaphy
Finance and news reporter
A family-owned manufacturing facility in the Irish county of Westmeath. Photo: PA

Ahead of Brexit, the Irish manufacturing sector is stockpiling at the fastest rate in more than 20 years.

Stocks of purchases in the sector have risen in 11 of the past 12 months — and February saw the biggest jump in purchasing activity in more than 19 years.

Manufacturers are attempting to mitigate Brexit-related supply chain issues, according to the AIB purchasing managers’ index (PMI), which conducts a monthly survey of firms in the sector.

“The impact of Brexit was evident in many of the components of the PMI as some firms moved to take action to avoid possible disruption to supply chains,” said AIB chief economist Oliver Mangan.

READ MORE: Surge in Irish businesses applying for post-Brexit UK access

Post-production stocks also rose to a 13-month high, in a sign that the industry is trying to guard against potential Brexit-related delays.

And uncertainty about Brexit saw business optimism within the sector fall to its lowest level in 18 months.

But there was also some positive news. A 69th straight month of growth in manufacturing activity saw the sector’s PMI reading jump to 54.0, from 52.6 in January.

In comparison, a similar indicator from the eurozone fell to 49.2 in February, its lowest level since the middle of 2013.

And employment growth in the Irish sector rose to a four-month high.

“The rise in the Irish index was driven by stronger growth in output and new orders, with firms reporting a pick-up in both domestic and international demand, most notably from the US and UK,” Mangan said.

Though the Irish Central Bank maintains that Ireland’s economy could withstand the impact of a no-deal Brexit, Irish business groups have consistently warned of the “devastating consequences” of such a scenario.