Ireland’s Manufacturing Growth Slows, Amid Export Decline

Dublin: Ireland’s manufacturing sector experienced a slowdown in October, with growth easing to its lowest level in ten months due to weakening exports and subdued sectoral activity, according to the latest AIB Manufacturing Purchasing Managers’ Index (PMI).

The PMI declined to 50.9 in October, down from 51.8 in September, indicating a slower pace of expansion. Despite remaining marginally above the 50 mark — which separates growth from contraction — the report highlights mounting challenges for Irish manufacturers, including intense competition and weak demand across European markets.

Broader Economic Growth Remains Strong

While the manufacturing sector softened, Ireland’s Modified Domestic Demand (MDD) — a key measure of underlying economic activity — grew robustly, expanding by 3.8% year-on-year in the first half of 2025. This growth was driven by strong personal consumption, higher government spending, and increased investment.

Reflecting these trends, the Department of Finance recently revised its full-year growth forecast for 2025 upward to 3.3%, from a previous estimate of 2%, accounting for the effects of the U.S. tariff hikes impacting the European Union.

Employment and Cost Pressures

The report noted that job creation in manufacturing slowed for the 11th consecutive month, hindered by a persistent skills shortage. Rising wage and energy costs continue to pressure margins, though input cost inflation eased to a 17-month low, largely due to falling raw material prices. Output prices, meanwhile, rose only marginally.

Despite current headwinds, 45% of manufacturers surveyed remain optimistic about increasing production over the next year, while 9% expect a decline. However, overall confidence has weakened to its lowest level in three months, reflecting uncertainty amid global economic volatility.

Manufacturers cited new product launches and expansion into foreign markets as key opportunities for growth in the coming year.

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