Ireland’s manufacturing sector has delivered another strong performance, with the AIB Manufacturing Purchasing Managers’ Index rising to 55.4 in August from 55.1 in July. The reading outpaces the Eurozone at 52.8, the UK at 51.5, and the US at 53.2. Output rose at its highest level since April 2025, marking August as a standout month for Irish manufacturing production and broad sector confidence.

Three drivers underpin August’s result and carry direct implications for manufacturing Ireland: the acceleration in new orders, signalling strong and sustained demand momentum into Q4; demonstrated pricing power protecting margins despite elevated input costs; and employment growth extending into its ninth consecutive month of expansion. Together, these confirm that Ireland’s solid manufacturing base is performing with exceptional resilience in an increasingly challenging global environment.

The order data are particularly striking. AIB chief economist David McNamara cited the fastest rise in new orders since April 2022, with output increasing at its highest rate since April 2025 and firms reporting continued robust order books. Sentiment rose to its highest since January, and looking ahead, half of surveyed firms predicted higher output over the next year, with only 7% forecasting a decline.

Supply chain pressures remain the sector’s most pressing operational challenge. Manufacturers reported severe supply chain disruptions in August, citing transportation delays linked to the Middle East conflict and general capacity constraints. Raw material delays extended backlogs of work. Input price inflation ticked up from July but remains below May’s four-year peak, as firms with robust order books managed to raise selling prices and protect margins.

Employment data reinforce the sector’s broader underlying strength. Production expanded for a tenth consecutive month, while manufacturers increased staffing levels in August for a ninth consecutive month, though the hiring pace slowed from July’s multi-year peak. Export orders remained muted amid geopolitical uncertainty. Output price inflation eased to a five-month low, as firms with robust order books sustained margins without excessive cost pressure on customers.

Three priorities emerge for senior Irish manufacturing leaders. First, capitalise on strong order momentum by investing in smart manufacturing capabilities that scale production efficiently to meet strengthening domestic and export demand. Second, build greater supply chain visibility and buffer stock strategies to reduce vulnerability to Middle East disruption and logistics constraints. Third, accelerate investment in workforce development to sustain the employment growth propelling sector-wide confidence.

The August 2026 AIB PMI confirms what the data have been signalling throughout the year: Irish manufacturing is a sector of genuine strength, outperforming global peers and building momentum across orders, output, employment, and business confidence. For C-suite leaders committed to manufacturing excellence, the conditions are firmly in place to invest further and convert the current order surge into durable long-term competitive advantage.