Energy price surge and supply chain delays drive up manufacturing costs
Inflationary pressure in the manufacturing sector hit record levels last month as supply chain delays and surging energy prices continued to push up costs.
AIB’s latest purchasing managers’ index (PMI) for the manufacturing sector here said average input prices increased more than in any month in the 23-year history of the survey, with more than three-quarters of firms reporting increases since September.
Anecdotal evidence linked higher costs to a wide range of raw materials, transport charges, gas prices and Brexit-related issues.
The report noted that production remained constrained by supply delays “with lead times lengthening the most in any month on record”.
Subsequently, rates of input and output price inflation both reached new survey highs in October, AIB said. Headline inflation in the Irish economy rose to a 13-year high of 3.7 per cent in September as the cost of energy soared.
The European Central Bank insists the current rise in inflation will be transitory but others argue the uptick might be more long lasting.