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Dublin: 5°C Friday 27 November 2020

'Worst on record' job losses as over 40% of manufacturing firms cut staff

Some 41% of firms surveyed say they let workers go in April.

Image: Frank Gunn

THE IRISH MANUFACTURING sector suffered further “unprecedented declines” in output, new orders and exports in April as global demand shrunk as a result of the Covid-19 pandemic, according to a new report by AIB.

The bank’s monthly Purchasing Managers’ Index (PMI) survey also revealed that the pace of job shedding within the sector “equalled the worst on record” with 41% of firms cutting staff last month.

Output at the firms surveyed plummeted 70% from March to a record low in April and at the fastest rates in the survey’s 22-year history.

New orders also sank to a record low according to the survey, “surpassing the previous nadir set in 2008” with almost two-thirds of firms reporting lower demand for their products.

Fresh demand from export markets also took a hammering in the face of the global lockdown. The volume of new orders from foreign markets fell in April to “well below the previous record low set in February 2009 during the global financial crisis”.

The headline index, which groups together each of these individual results, declined to 36.0 from 45.1 in March.

Commenting on the survey, AIB chief economist Oliver Mangan said that the Irish figures are in line with global trends.

“The flash readings for the Eurozone, UK and US manufacturing PMIs for April show declines to 33.6, 32.9 and 36.9, respectively, similar readings to Ireland.”

“There were some glimmers of hope in the very weak Irish data,” Mangan said.

“There was a smaller decline in the new orders index than in March, while the fall in the future output index was very modest in April, having plunged in March.”

He added that the data is expected to improve as lockdown restrictions are lifted.

Some of the biggest manufacturing firms on the island have been affected by the coronavirus outbreak.

Last month, cardboard box-maker Smurfit Kappa shelved plans to pay a €193 million dividend on last year’s earnings citing the uncertainty caused by the pandemic.

In the north, some 72% of manufacturing companies — including aircraft-maker Bombardier — have furloughed staff, according to industry body Manufacturing NI.

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