Business Irish

Thursday 2 October 2014

Services sector records fastest growth in 7 years

Published 04/07/2014 | 02:30

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Growth in France contracted
Growth in France contracted

IRELAND’s services sector grew at its fastest pace in seven years last month.

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But euro zone services growth eased in June as Germany slowed and France contracted.

In Ireland, companies reported a sharper rise in activity and new business being recorded, according to the latest Purchasing Managers’ Index for the sector.

Philip O’Sullivan, economist with specialist bank Investec, said the strong data is expected to continue over the coming months.

“Given the recovery underway both at home and across Ireland’s key trading partners, we believe that this confidence will prove well-founded and expect to see further strong Services PMI readings over the coming months at least,” he said.

The seasonally-adjusted business activity index hit 62.6 in June, signalling a further strong expansion in activity. This was up from 61.7 in the previous month and suggested the fastest pace of expansion since February of 2007.

PMIs are regarded as reliable forward-looking indicators of the health of an economy and are therefore closely watched by analysts and economists.

The survey found that businesses remained confident that activity will continue to rise over the coming year. Higher new orders from home and abroad led total new business to increase in June.

Indeed, the rate of growth in new export orders quickened in June as companies were reportedly able to secure new business from both existing and new clients.

Strong growth of new work meant staff were taken on, with the rate of job creation quickening from that seen in May.

Employment has now increased in each of the past 22 months.

Elsewhere, euro zone business expanded at the slowest rate in six months in June, but new orders poured in at the fastest pace in over three years, suggesting growth will accelerate.

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