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    AIB Manufacturing PMI for Ireland drops from 52.8 to 52.2

    by VT Markets
    /
    Jan 2, 2026
    The AIB Manufacturing Purchasing Managers’ Index (PMI) for Ireland fell to 52.2 in December, down from 52.8. While this marks a slowdown in manufacturing, the sector is still growing since the index remains above 50. This drop could signal difficulties for manufacturers as global economic uncertainty looms. Analysts will closely monitor upcoming data to gauge the effects on manufacturing and overall economic growth.

    Loss of Momentum

    The December PMI of 52.2 shows that the Irish manufacturing sector is losing momentum. Although it continues to expand, this is the second month in a row that the index has decreased, suggesting a cooling trend as we approach the new year. This situation prompts us to be cautious about Irish equities and may lead us to consider protective put options on the ISEQ 20 index to guard against possible downturns. This slowdown adds complexity for the European Central Bank (ECB), especially when considering the ongoing inflation seen across the Eurozone in late 2025. Recent Eurostat data revealed that HICP inflation stood at 2.4%, which still poses a challenge for the ECB’s target rate. The contrast between slowing growth and persistent inflation creates uncertainty about future interest rate decisions, making long-dated interest rate swaps worth attention. We also need to take a closer look at Ireland’s main export markets, which showed signs of weakness toward the end of last year. Preliminary data from Q4 2025 indicated a slight decline in German industrial orders, a crucial destination for Irish goods. This could put downward pressure on the Euro, suggesting potential trades that favor the pound or dollar, such as buying EUR/GBP puts.

    Historical Context

    This situation echoes the slowdowns we saw in 2023, where early drops in PMI readings often preceded broader market volatility. In light of this historical context, increasing our exposure to volatility may be a smart strategy. We will keep an eye on options for the VSTOXX index, which could rise significantly if this manufacturing weakness extends across Europe. Create your live VT Markets account and start trading now.

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