DUBLIN (Reuters) – Irish manufacturing activity recovered slightly after suffering its sharpest monthly decline on record in April but still contracted rapidly in May as the economy began to slowly emerge from a coronavirus lockdown, a survey showed on Tuesday.
Ireland partially eased stay-at-home restrictions two weeks ago that had been rolled out from mid-March and had shut all but non-essential operators like supermarkets and petrol stations in what had been Europe’s fastest-growing economy.
With the unemployment rate, including those on temporary COVID-19 jobless payments, at a record 28.2%, Prime Minister Leo Varadkar has suggested a speeding up of one of Europe’s most conservative reopening plans could be announced this week.
Government data suggests the unemployment rate has levelled off and the AIB IHS Markit manufacturing Purchasing Managers’ Index (PMI) also showed factories may be over the worst of the sudden downturn, rising to 39.2 from 36.0 in April.
That was still far below the 50 mark separating growth from contraction, and the eighth-worst reading on record.
The output, new orders and exports sub-indexes rose from record lows but still recorded their second-lowest mark in the survey’s 22-year history. The future output index rose back above 50.0, however, as marginally more firms predicted growth than contraction in a year’s time.
The pace of the coronavirus-related slump also eased in neighbouring countries, with sister surveys for the euro zone as a whole rising to 39.4 and Britain to 40.6.
“The Irish data are in line with global trends. The indices should continue to move higher as lockdown restrictions are eased and economic activity picks up again,” AIB Chief Economist Oliver Mangan said in a statement.
Reporting by Padraic Halpin; Editing by Catherine Evans