Irish manufacturing growth slips to three-year low on Brexit - PMI

DUBLIN, Aug 2 (Reuters) - Growth in Ireland’s manufacturing sector fell to its lowest level in more than three years in July in the wake of Britain’s vote to leave the European Union, a survey showed on Tuesday.

The Investec Manufacturing Purchasing Managers’ Index fell to 50.2 in July from 53.0 in June, leaving it fractionally above the 50 mark that separates expansion from contraction.

It was the slowest pace recorded in the 38 consecutive months of growth since May 2013.

The New Orders subindex posted a contraction in activity for the first time since June 2013 with a reading of 49.9.

A number of those surveyed linked lower new business to the United Kingdom’s June 23 referendum vote to leave the European Union, the authors said. The UK is the second-largest market for Irish merchandise exports.

“Our sense is that conditions in the Irish manufacturing sector are likely to get worse before they get better,” said Philip O’Sullivan, chief economist at Investec Ireland, who linked the fall in the headline number to the UK vote.

“We draw a modicum of reassurance from the relatively modest declines in both New Orders and New Export Orders,” he said.

New export orders contracted for the second time in three months.

The Irish economy has outperformed the rest of the euro zone for the past two years and is forecast to do so again this year with the government predicting an expansion in gross domestic product of 4.9 percent.

Reporting by Conor Humphries; Editing by Catherine Evans