The slowly improving trend for manufacturing seen since the turn of the year has not been sustained, according to the Federation of Industry’s manufacturing survey for May.

The survey registered a sharp fall in order books, the second worst result registered since the end of last year. Firms were also less positive in their near-term outlook for production.

In this regard, the Intermediate Goods sector and the Investment Goods sector registered significant declines in order books compared to the previous month. Order books for the Consumer Goods sector remained broadly stable.

At the same time, production expectations remained in positive territory but weakened for all three sectors.

In terms of stocks of finished products, the number of firms with “above normal” stock levels was lower than a month before, even though it was still high, compared to the previous nine months.

According to the May survey, manufacturers also expect to reduce their selling prices over the following three months. The number of manufacturing firms claiming this declined substantially, compared to April levels.

This shift is attributed to the Consumer Goods sector where, in contrast to the previous two months, there were more firms expecting to increase prices rather than reduce them. Selling price expectations for the Intermediate and the Investments Goods sectors remained relatively stable.

In the meantime, employment expectations remained positive, but at lower levels than in the preceding month. This is a result of less positive employment expectations in the Consumer Goods sector, which outweighed less negative employment expectations in the Investment Goods sector.

The May Industry Survey was carried out between 1 and 30 May. 210 manufacturers, employing around 12,382 employees, replied to the survey.

The FOI will continue to monitor the outlook of manufacturing industry through its surveys on a monthly basis. It aims to provide the forum through which manufacturing firms can identify and hopefully address issues of common concern emerging from such surveys.