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Purchase managers' budgets to fall

Thursday, July 02 10:28:40

Over half of Ireland's purchasing managers expect their budgets to fall further over the next six months according to a study by the Irish Institute of Purchasing and Materials Managers (IIPMM).

Half of respondents say their purchasing budget is likely to decrease over the next six months. Just 13 per cent forecast an increase.

"There are few indicators of an early recovery in these figures but the encouraging signs are that the rate of decline in purchasing seems to be slowing and Irish companies are becoming more competitive," commented Jane O'Keeffe, President, IIPMM.

She said that while 53 per cent of purchasing managers reported a fall in orders in the first half of the year, a lower number (29 per cent) expected a decline in purchasing to continue in the second half. 22 per cent expect the volume of purchasing to increase over the next six months.

The outlook appears to be a little more positive for 2010. A third expect the level of purchasing to increase although one in five (21 per cent) forecast a continuing decline.

Ms O'Keeffe added that one of the few benefits of the downturn seems to be that Irish industry is becoming more competitive. Over three quarters of respondents (78 per cent) say that Irish suppliers have become more competitive over the last 12 months.

However a negative consequence of the recession is that a majority of purchasing managers (57 per cent) report that they have lost suppliers which have closed.

Forty per cent of respondents operate primarily in export markets and 57 per cent in the domestic market. Sixty per cent do not anticipate a recovery in the global economy until the second half of 2010 at the earliest.

Respondents are more gloomy on prospects for the Irish economy. Half do not anticipate a recovery in the Irish economy until 2011 at the earliest. And over a quarter do not anticipate a recovery in Ireland until the second half of 2011 or later.