Struggling service sector boosted by rise in exports
A RISE in exports led to slight recovery in the services sector in October, but it remains weak. Global data, however, showed a more positive environment abroad.
Stockbroker NCB's services PMI measure of the health of the Irish services sector showed a rise from 48.8 to 50.9. It was just enough to push the index into positive territory. It was led by growth in new orders from abroad. Service exports have now risen for 14 straight months.
Overall, new orders remained weak as the lack of domestic demand hit services industries disproportionately hard. The total volume of new orders fell in October for the second month in a row.
Confidence remains at a premium even with a rise in the overall level of economic activity.
In fact, confidence among services managers fell to the lowest level in a year in October.
Managers do expected activity to be higher next year, however.
Most believe that recovery will be led by orders from abroad.
New business remains fragile. A pick up in export orders was not enough to offset the fall in orders in the domestic market.
Employment in services continued to fall in October.
The rate of job losses last month was the sharpest since April. Seasonal factors appear to be behind some of the fall.
Tourist-dependant sectors like transport and leisure were especially hard hit. Job cuts were common across most segments. Twice as many companies cut jobs than hired.
Data released yesterday showed that recovery in the eurozone remained disproportionately focused on Germany.
Weaker data from the likes of Spain and Ireland outweighed an upswing in activity in Germany.
Sterling was boosted after its PMI data showed the UK service sector was stronger than expected. The UK PMI figure for September rose to 53.2 last month from 52.8.