Growth accelerates in services to boost belief in recovery
NEW orders in the services sector expanded at the sharpest pace last month in more than six years, adding to mounting evidence of an economic revival.
Growth in new business accelerated for the second month running and confidence was at a seven-year high, according to the latest services Purchasing Managers' Index from specialist bank Investec.
The rate of expansion in activity eased from October but remained sharp, while the rate of job creation was little changed from the previous month.
The business activity index hit 57.1 in November, a fall back from the 60.1 seen in October.
Anything above 50 indicates expansion while a figure below that signals contraction.
However, the readings for both the UK and the eurozone slipped.
Nevertheless, Investec economist Philip O'Sullivan said the report showed continued strength in the services sector in Ireland during November.
"Although the rate of growth in business activity slowed from the previous month, it remained higher than the series average," he said.
"The services sector has now recorded growth for 16 consecutive months. With confidence improving to a seven-year high during November, it is likely to continue to do so for the foreseeable future.
"The widespread optimism was reported to be due to general positive sentiment in the wider Irish economy."
Purchasing Managers' Indices are watched closely by analysts and are regarded as reliable forward-looking indicators of activity in the economy.
A number of businesses have predicted that new business will increase over the coming year, feeding through to growth of activity.
New orders increased at a substantial pace that was the sharpest since March 2007.
Improved client confidence was a key factor. New business from abroad also rose strongly, with the UK a source of higher new orders.
A further sharp rise in employment was also recorded, with staffing levels up for the 15th month in a row.
The rate of job creation, however, was little changed from the previous month but was well above the series average.
Mr O'Sullivan said the report served as another reminder of the relative improvement under way in the Irish economy.
"In particular, the continued strength in staffing levels tallies with recent employment data from the CSO, showing annual growth of 3.2pc in the workforce," he said.
"For some months now, we have been expressing confidence that growth will accelerate into 2014 on the back of a stabilising domestic economy and improving export markets."
The UK services sector maintained its recent run of strong growth during November, ahead of the autumn statement from Chancellor George Osborne today.
The UK's business activity index recorded a level of 60 in November. It was, however, a five-month low and down from October's multi-year high.