Activity in Ireland’s service sector continues to grow
The latest Purchasing Managers Index from AIB marks two and a half years of successive monthly improvement in business activity, new business and employment.
The report states that demand in the sector continued to bolster these increases.
The index dropped slightly to 55, down from 56.7 in July and 56.8 in June.
Readings above 50 indicate overall growth in activity.
“The continued robust performance by the Irish services sector reflects ongoing healthy demand conditions,” said Oliver Mangan, AIB Chief Economist.
“This was evidenced by another strong increase in new business volumes at Irish services firms from both domestic and export customers, though their rate of growth has slowed in recent months.
“Employment continued to increase at a solid pace, picking up from July, while there was a further significant rise in the level of outstanding work,” he added.
The flash services PMIs fell into contraction territory in August in the Eurozone and UK, with the indices declining below the 50 level to 48.3 and 48.7, respectively.
Meanwhile, the US index slipped back to 51 in August.
There were variations in the growth in business activity across the four sub-sectors covered in the survey.
“Technology, Media, Telecoms saw buoyant growth, while Transport, Tourism, Leisure contracted for a second consecutive month,” Mr Mangan said.
“Meanwhile, firms across the four services sectors remained very optimistic about their expectations for activity levels over the next 12 months,” he added.
Today’s data shows that inflationary pressures remained elevated in the services sector against the backdrop of an on-going strong expansion in activity.
“Input prices continued to experience significant upward pressure, most notably from rising labour costs and fuel bills,” Mr Mangan said.
“Higher operating costs continued to be passed on in higher selling prices. That said, the rate of increase in both input and output prices has eased considerably in recent months,” he added.