Services sector continues to grow solidly in October
There was a sustained uptick in activity in the services sector last month, the latest AIB Ireland Services Purchasing Managers Index shows.
However, growth momentum eased from September’s six-month high, the data shows.
Overall the index fell from 55.7 in September to 53.8 in October.
“The rate of growth in the Irish services sector was also faster than the UK and Eurozone flash PMIs at 51.8 and 51.2, respectively; but slower than the US service PMI at 55.3,” said David McNamara, chief economist of AIB.
Output levels grew as new work expanded and respondents referenced stronger business and consumer spending.
There was also a strong pace of expansion in export sales as the rate of growth accelerated to its fastest level since March.
“The volume of outstanding work also rose at a solid pace on the month, albeit easing for a second consecutive month,” said Mr McNamara.
“The survey shows uneven gains in all four sub-sectors, led by a rapid expansion in the Technology, Media & Telecoms, but a more modest gain in Transport Tourism & Leisure.”
“Employment growth eased overall, with an employment fall recorded in the financial services sector, offset by modest gains in the other three sectors.”
But steep rises in input costs led to margins remaining under pressure.
This led to more cautious staff hiring policies during the month, AIB said.
“Respondents cited fuel and salary costs as the key drivers of cost increases in October,” said Mr McNamara.
“However, firms also continued to protect margins by raising prices for customers, with the Prices Charged Index higher on the month.”
The PMI also showed that business sentiment about the prospects for activity over the coming year remained positive, but eased in October.
Respondents pointed to new product launches and improving economic conditions, offsetting concerns around the impact of global geopolitical uncertainty, Mr McNamara said.
Article Source – Services sector continues to grow solidly in October – RTE
