Irish businesses are frantically stockpiling a record number of products amidst the chaos of Brexit.
Afraid that goods might not reach Ireland, manufacturing companies are buying more produce than they have in over 20 years.
As in February, manufacturers stockpiled raw materials and semi-finished goods last month in the hopes of staving off potential supply disruptions caused by Brexit, according to AIB’s Manufacturing Purchasing Managers’ Index, released on Monday.
Unfortunately, as buying increased, costs also increased for businesses, fuelled by rising raw material prices, particularly for steel.
“As in February, the impact of Brexit was again evident in March as some firms act to avoid possible disruptions to supply chains,” said Oliver Mangan, chief economist at AIB.
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“Purchases of raw materials and semi-finished goods remained at high levels as firms moved to guard against possible delays or interruption to supplies owing to Brexit.”
Amidst these uncertainties, growth slowed down in March for the manufacturing sector.
But there was some good news for Irish firms, as new business from abroad increased at the fastest pace in four months, with greater demand from some UK firms.
More jobs were created in March, as employment in the sector grew more quickly than it had since October last.
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Businesses included in AIB’s survey said they took on new the new staff in order to fulfil customer demand and increase productivity in the hope of garnering new business.
Despite fears around Brexit, many manufacturers remain optimistic about the future.
“Business optimism in manufacturing remains very upbeat, hitting a three month high, though the rate of output growth did ease slightly in March,” said Mr Mangan.
