Manufacturing & Supply Chain

Following only a slight improvement in October, operating conditions across Ireland’s manufacturing sector improved solidly in the penultimate month of 2025, according to the AIB Ireland Manufacturing PMI® for November 2025. This upturn was fuelled by a strong increase in new orders (in part supported by a fresh rise in new export sales) and renewed growth in production. Additionally, optimism surged to an 11-month high, pointing to historically strong sentiment across the sector. However, hiring activity came to a near standstill in the latest survey, with the growth rate the slowest in the current 12-month upturn. Firms also reported a resurgence in backlogs, signalling rising pressures on capacity.

The headline AIB Ireland Manufacturing PMI® is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of the sector.

The headline PMI posted 52.8 in November, up from 50.9 in October, signalling a solid improvement in the overall health of the Irish manufacturing sector which was the most pronounced in four months and stronger than the long run average (52.0). Operating conditions have now improved in each month since the start of the year.

Driving the latest improvement was a strong increase in new orders. The latest upturn was the most marked in five months. Anecdotal evidence linked the increase to improved underlying demand conditions. Demand for Irish goods from abroad also strengthened in November, thereby marking the first month of growth in new export orders since July. The rate of increase was only slight, but the fastest since March.

Strong overall growth in new factory orders prompted companies to raise their output. Production rose solidly in November, after no change in October.

Rising new work encouraged firms to also further raise their purchasing activity in November. Buying of inputs has now risen for a third consecutive month. The latest upturn was modest, however, and only slightly stronger than seen in the month prior.

Higher purchasing activity contributed to a near-stabilisation in stocks of inputs, following a sharp decline in October. The respective seasonally adjusted index reached a four-month high. Firms, struggled to receive inputs in a timely manner however, as suppliers’ delivery times lengthened for the seventh consecutive month in November. Moreover, the incidence of delays was the most pronounced in three years.

The employment picture also showed signs of further cooling. Manufacturing companies based in Ireland broadly halted their hiring activity in the penultimate month of the 2025. The latest uptick in workforce numbers was the weakest in the current 12-month period of growth.

Subsequently, backlogs of unfinished work were accumulated in the latest survey period. This marked the first increase in four months. The pace of backlog accumulation was the strongest since February.

Regarding pricing, Irish goods-producing firms encountered increased cost pressures in November, with numerous reports of widespread price hikes. The rate of input price inflation was faster than seen in October, albeit still slower than the long-run average. Companies were relatively cautious in transferring these higher costs to their clients. While the rate of charge inflation did increase over the month, it was slight overall.

Finally, business confidence across Irish manufacturing firms strengthened to an 11-month high in November, underpinned by hopes of improved demand conditions. The respective index also moved above the series average for the first time in three months.

Commenting on the survey results, David McNamara, AIB Chief Economist, said: “The AIB Irish Manufacturing PMI indicated that growth picked up in November, with the index at 52.8 compared to 50.9 in October. The improvement in manufacturing conditions in November was driven by strong gains in current output and new orders. The Irish manufacturing PMI remains above the flash November readings for the Eurozone, UK and US at 49.7, 50.2 and 51.9, respectively.

“Output saw renewed growth in November, with respondents citing stronger demand conditions. This was also reflected in a first rise in export orders in four months. Overall, new orders growth accelerated to an above-average pace for the survey. However, employment growth slowed to near stagnation, extending a recent trend of weakening growth in hiring. While some firms reported adding new hires during the month, others reduced their workforce in November. Elsewhere, the purchases index remained in expansionary territory in November, albeit the pace of growth was moderate.

“The November survey showed an acceleration in input and output price inflation, linked to higher raw material costs. However, output price inflation remained close to the 17-month low it reached in October, suggesting limited
inflationary effects at present.

“Irish manufacturers maintained a positive assessment of the outlook for future activity levels, with the sentiment index reaching its highest level in nearly a year. Manufacturers linked business optimism to improved sales and expected new contracts in the coming year.”