Growth in service sector picks up in February
The latest AIB Services Purchasing Managers’ Index (PMI) reveals that growth in the country’s service sector picked up in February.
The business activity index rose to 58.2 last month, from 54.1 in January.
Readings above 50 indicate overall growth in activity.
“This is the highest reading since May and points to a robust rate of growth in services activity in February,” said Oliver Mangan, AIB Chief Economist.
“It is also well above the flash February Services PMI readings for the euro zone, UK and US of 53, 53.3 and 50.5, respectively,” he added.
The figures show that the index has recorded monthly improvements in business activity, new business, and employment for exactly two consecutive years.
The figures show a further marked rise in new business volumes in Irish services firms in February, including in new export business, reflecting improving demand conditions both at home and abroad.
“This resulted in another significant increase in backlogs of outstanding business,” Mr Mangan said.
“There was a further rise in employment, but at a modest pace, amid reports of difficulties in sourcing staff,” he added.
Broken down by sector, faster activity growth in three of the four monitored industries was accompanied by a stabilisation registered at Transport, Tourism & Leisure firms.
For the fourth month in a row, the Technology, Media & Telecoms group topped the growth rankings.
The data shows that companies were more optimistic about their future and registered the strongest degree of confidence in a year.
Cost pressures eased but charges were hiked at a faster rate.
“Businesses continued to report upward pressure on wages, as well as transport and energy costs, though the rate of increase in input prices eased somewhat further to a 20-month low,” Mr Mangan said.
“Meanwhile, higher costs continue to be passed on to customers, with the rate of increase in selling prices re-accelerating in the month,” he added.