New export orders rise sharply in January - PMI
Ireland’s all-important services sector continued its strong rate of expansion last month, with new export orders rising sharply.
The latest Purchasing Mangers’ Index for the sector showed continued strong growth in demand from both home and abroad, with more than one in three of those surveyed reporting increased new business through their doors.
And businesses were given a boost as lower oil prices kept cost inflation in check, as it slowed to its weakest in ten months. However, the savings on fuel were partially offset by higher salaries and the relative weakness of the euro compared to sterling.
Employee numbers are increasing. Jobs growth has now been recorded in each of the past 29 months.
Philip O’Sullivan, economist with specialist bank Investec, said that combined with the Manufacturing PMI published on Monday, the data shows a solid start to the year.
“The forward looking Business Activity: Expected Levels in 12 Months’ Time index was little changed in January, suggesting that the softer global backdrop has not dampened the optimism of services firms based in Ireland,” Mr O’Sullivan said.
“Almost 15 times more panellists forecast activity to be higher in 12 months’ time compared to the number that predict a decline.”
The seasonally adjusted business activity index posted 62.5 in January, down fractionally from 62.6 recorded in December. Anything above 50 signals expansion.
The services sector includes hotels, bars, restaurants, hairdressers, IT and transport.
The reading has been above 50 now for 30 months.
In the UK, British businesses enjoyed an unexpectedly strong start to the year, marked by faster hiring and rising new orders that bode well for economic growth in early 2015.
The services PMI there, also published today, rose to 57.2 in January from a 17-month low of 55.8 in December.