Brexit diminishes Irish services growth to slowest pace in three years
The Irish services industry is becoming increasingly cautious amid Brexit fears and uncertainty within the global economy, new research has shown.
According to the Investec Services PMI report growth in the sector moderated to its slowest pace since June 2013. The headline reading for September contracted to 56.2 as the industry awaits the terms of Britain's exit from the EU.
New business slowed for the fourth month in a row with some panellists mentioning reduced interest from customers. As a result the new export business index weakened to a six-month low.
Despite the fall off in new business, companies are still struggling to deal with existing client demand. The backlogs of work index increased for the 40th month in a row in September, causing firms to add to their headcount. However, the rate at which the industry is adding staff slowed to a three year low.
Investec chief economist Philip O'Sullivan said: "Taken together, the latest PMI reports indicate a weakening in the rate of growth in activity across much of Ireland’s private sector compared to what was seen in the first half of the year.
"With further uncertainty around Brexit and the US Presidential election expected between now and the year end, we are growing increasingly cautious about the prospects for Q416."