Category Archives: Irish manufacturing PMI

6/8/15: Irish Services PMI: July Mirage of Growth


Today, Markit released Services PMI for Ireland. Note: I have covered details of the Manufacturing PMI release link here.

On Services side, headline index reading in July was 63.4, which is marginally ahead of 63.3 registered in June. July reading was the highest in 109 months, after June posting the highest reading in 108 months.

Per Markit, "Panellists mainly linked the latest increase in activity to improving economic conditions." As I have shown in the past, the index is only now starting to re-couple with actual services activity indicators, suggesting that much of the PMI reading is biased by the specific, concentrated MNCs-led activity. Still, the PMI has now reached dizzying heights.




On another positive side, Services PMI boom is coinciding with Manufacturing PMI boom (also most likely driven by MNCs tax optimisation strategies):


But, as the next post details, real actual, CSO-measured activity in the Services sector was nowhere near all-time highs in growth in 1H 2015. In simple terms, PMI is telling us porkies, or PMI survey participants are telling Markit porkies, or both...

What is even more disturbing is that Manufacturing PMI figures are also in the territory of imagineering, where fair princesses and unicorns run through the fields of golden pansies with butterflies at their... ah, whatever... just take a look at the above chart and read this: http://trueeconomics.blogspot.it/2015/08/5815-irish-industrial-production-up.html.

4/8/15: Irish Manufacturing PMI: July 2015


Irish Manufacturing PMI released by Markit showed accelerated growth in the sector in July, with activity growth signal rising from 54.6 in June to 56.7 in July. This marks 26ht consecutive month of index readings above 50.0 (23rd consecutive month of readings statistically significantly above 50.0).


Overall, the trend remains for high growth in the sector, albeit the rate of increase in growth (second derivative) is moderating (turning negative) since around February 2015.


It is worth noting that the moderating trend in PMIs is confirmed by the most recent QNA datum showing Industry sector - excluding Building and Construction - in a q/q decline in 1Q 2015 of 0.31%, while the sector posted a 9.63% growth year-on-year.

Overall, another month of gains in Manufacturing is a good sign of underlying strength in the sector.

10/7/15: Irish Quarterly PMIs: Manufacturing, Services & Construction


Irish PMI for June, released earlier this month by Markit (co-branded by Investec) give us a chance to look at quarterly activity. Given volatility in both Manufacturing and Services activity in the monthly data, this provides a slightly better potential insight into what is going on in the economy (see caveat at the bottom of the post).

Q2 2015 average PMI for Manufacturing sector reads 55.8 - the lowest for any quarter since Q2 2014, but still solidly in an expansion range. Q2 2015 marks second consecutive quarter of declining manufacturing PMI readings. However, on a positive side, Q2 2015 was the 8th consecutive quarter of readings above 50. Year on year, growth in the sector remained largely unchanged and growth de-accelerated on a quarterly basis.

Q2 2015 average PMI for Services rose marginally to 61.8 from 61.6 in 1Q 2015 and is below 62.1 average for Q2 2014. Q2 2015 marks 18th consecutive quarterly reading above 50 for the Services sector. Year on year, growth slowed down in the Services sector and quarter on quarter it remained largely static.

Construction sector PMI (co-branded with Ulster Bank) posted quarterly average of 60.3 in Q2 2015, well above 54.0 average for Q1 2015, but below 61.2 average for Q2 2014. Thus, year on year growth fell in the Construction sector, but there was a significant acceleration in quarter on quarter growth. Q2 2015 marks 8th consecutive quarter with average PMI above 50.0.


Composite PMI (subject to future revisions due to sectoral weights changes once we have Q1 and Q2 national accounts) posted a reading of 60.4 in Q2 2015, up on 59.0 in Q1 2015 and marginally higher than 60.2 reading in Q2 2014. Year on year, composite PMI signalled basically static performance, while quarterly growth improved somewhat in Q2 2015.


Caveat: Irish PMI readings have very low direct correlation to actual growth in the economy, measured by either GDP or GNP. Historically, PMIs levels and changes explain at most ca 10.6 percent of variations in GNP and at most 8.8 percent of variations in GDP. In other words, booming PMIs, on average, do not translate into booming economy. 

3/6/15: Irish Manufacturing PMI: May 2015


Irish Manufacturing PMI for May came in at a stronger 57.1 reading up on 55.8 in April. The indicator currently stands above 12 mo average (56.3) and 3mo average (56.6). 3mo average through May is marginally up on 3mo average through February 2015 (56.5).


Looking at shorter run shows that current levels of activity are consistent with flattening out of the trend at high levels at the trend level of 56.5-57.0:


Overall, good solid reading for Manufacturing, subject to all usual caveats relating to questionable MNCs activities and data bias in favour of MNCs.

6/5/15: Irish Services & Manufacturing PMI: April 2015


Irish Services PMI (Markit & Investec) for April posted slightly lower rate of growth in the sector compared to March, declining marginally to 60.9 from 60.6 a month ago. Current reading marks the 14th consecutive month of Services PMI above 60.0 and 33rd consecutive above 50.0 reading, so not surprisingly, the sector is running hot.

Irish Manufacturing PMI is covered in more details here: http://trueeconomics.blogspot.ie/2015/05/1515-irish-manufacturing-pmi-april-2015.html


Stripping out some volatility:

  • Services sector PMI 3mo average is currently at 62.2, running above 3mo average through January 2015 (61.0) and 3mo average through April 2014 (60.0). 6mo average through April 2015 is just 0.4 points below 6mo average through October 2014.  Historically, current Services PMI 12 mo average of 61.8 compares favourably to the post-crisis period average of 56.0 and pre-crisis average of 57.6. Crisis period average was 50.7.
  • Manufacturing sector PMI 3mo average through April 2015 is at 56.1 which is somewhat lower than the 3mo average through January 2015 (56.7) but well ahead of the 3mo average through April 2014 (54.8). 6mo average for the period through April 2015 is 0.5 points above the 6mo average through October 2014. Historically, current Manufacturing PMI 12 mo average of 56.1 compares favourably to the post-crisis period average of 52.7 and pre-crisis average of 51.8. Crisis period average was 51.2.


In April, both Services and Manufacturing PMIs posted some marginal slowdown in activity compared to April 2014. Services PMI slipped from 61.9 to 60.6 and Manufacturing PMI declined from 56.1 to 55.8. Nonetheless, both series have now been jointly trending above 50.0 for 23 months, which is a solid performance.