The AIB Manufacturing PMI for Ireland, a key gauge of industrial health, climbed to 52.80 in November 2025. This reading surpasses both the previous month’s 50.90 and the 12-month average of 52.00, indicating a solid expansion phase. The manufacturing sector’s growth is supported by stronger new orders and output, despite ongoing challenges from global supply chain disruptions and inflationary pressures.

Drivers this month

• New orders increased significantly, contributing 0.45 points to the PMI rise.
• Output growth accelerated, adding 0.30 points.
• Employment levels remained stable, with a slight positive contribution of 0.10 points.
• Input price inflation moderated, easing cost pressures.

Policy pulse

The PMI reading sits comfortably above the neutral 50 mark, suggesting manufacturing is expanding despite the European Central Bank’s (ECB) recent rate hikes aimed at curbing inflation. Ireland’s inflation rate remains elevated at 4.10% YoY, but easing input costs and stable demand support continued growth.

Market lens

Immediate reaction: EUR/USD strengthened by 0.15% within the first hour post-release, reflecting improved sentiment on Ireland’s economic resilience. The 2-year Irish government bond yield rose modestly by 3 basis points, signaling cautious optimism among fixed income investors.

The manufacturing PMI’s upward trajectory aligns with other core macroeconomic indicators in Ireland. Industrial production grew by 1.20% MoM in October, while exports expanded 3.50% YoY, driven by pharmaceuticals and technology sectors. Unemployment remains low at 4.30%, supporting steady domestic demand.

Monetary Policy & Financial Conditions

The ECB’s tightening cycle, with the main refinancing rate now at 3.75%, has increased borrowing costs. However, Ireland’s robust export base and multinational presence help offset tighter financial conditions. Credit growth to manufacturing firms slowed slightly to 4.50% YoY but remains positive.

Fiscal Policy & Government Budget

Fiscal policy remains supportive, with the government maintaining investment in infrastructure and R&D. The 2025 budget projects a deficit of 1.80% of GDP, down from 2.30% in 2024, reflecting prudent fiscal management amid global uncertainties.

External Shocks & Geopolitical Risks

Ongoing geopolitical tensions, including supply chain disruptions from Eastern Europe and trade frictions with the UK post-Brexit, pose risks. However, Ireland’s diversified trade partners and EU membership provide buffers against severe shocks.

Market lens

Immediate reaction: EUR/USD appreciated 0.15% post-release, while Irish 2-year yields nudged higher by 3 basis points. The Irish equity market, represented by CRH, gained 0.80%, reflecting investor confidence in manufacturing strength.

Looking ahead, the manufacturing sector faces a mix of opportunities and risks. The base case scenario (60% probability) envisions steady PMI readings around 52-53, supported by stable demand and easing inflation. A bullish scenario (20%) could see PMI rise above 54 if global supply chains normalize and fiscal stimulus accelerates. Conversely, a bearish scenario (20%) risks a drop below 50 if geopolitical tensions escalate or ECB tightening sharply curtails credit availability.

Structural & Long-Run Trends

Long-term trends favor Ireland’s manufacturing due to its strong tech and pharma clusters, skilled labor force, and EU market access. However, automation and green transition pressures require ongoing investment. The government’s focus on innovation and sustainability will be critical to maintaining competitiveness.

Financial Markets & Sentiment

Investor sentiment remains cautiously optimistic. The Irish equity market, including CRH and SMT, is expected to track manufacturing momentum. The EUR/GBP pair, sensitive to UK-Ireland trade dynamics, may see volatility depending on Brexit-related developments.

The November 2025 AIB Manufacturing PMI for Ireland signals a resilient industrial sector navigating a complex macroeconomic landscape. The rebound to 52.80 reflects stronger demand and output, supported by stable employment and easing input costs. While monetary tightening and geopolitical risks remain headwinds, Ireland’s structural advantages and fiscal prudence provide a solid foundation for continued growth.

Monitoring upcoming ECB policy moves, global trade developments, and domestic investment trends will be key to assessing the sustainability of this expansion. Market participants should weigh the balanced risks and opportunities as Ireland’s manufacturing sector adapts to evolving global conditions.