Output volumes were stable in the three months to April after experiencing significant declines in the first quarter of 2024. Looking ahead, manufacturers are optimistic, expecting output to rise in the coming quarter, as per the survey.
The survey highlights that average cost growth remained high by historical standards and is anticipated to continue its strong pace into the next quarter. Both domestic and export price inflation are expected to see slight increases.
A positive shift in investment intentions was noted, with manufacturers planning to stabilise investments, marking a significant improvement from January when intentions hit a three-year low. Furthermore, investment in product and process innovation is projected to increase, showing the strongest sentiment since early 2022.
The business sentiment index improved to a balance of 9 per cent in April, up from minus 3 per cent in January. Export optimism also grew moderately. New orders declined at a slower rate in April, and growth is expected to resume in the upcoming quarter.
Despite the upbeat outlook, certain challenges persist. The main barriers to investment cited were demand uncertainty, inadequate net returns, and labour shortages, although concerns about the cost of financing have decreased significantly from recent highs.
ALCHEMPro News Desk (DP)
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