Service sector reverses declines
THE service sector here grew at the fastest pace since July last month, boosted by a recovery in the home market that added to the already growing exports.
The research, published by NCB Stockbrokers, marks a welcome change after the sector recorded declines in each of the previous five months, dragging down the economy even as export-oriented sectors soared.
The Purchasing Managers' Index (PMI) of activity in the services sector, rose to 55.1 from 53.9 in January, recording growth for the second month in a row.
February's expansion was solid with managers in the sector saying better demand and successful marketing activities drove increases in new orders in particular. Unlike manufacturing, the service sector is mostly driven by demand within the Irish economy and is a better driver of jobs.
"The less drag from domestic demand, the greater the chance of a positive outcome for GNP in 2011," he said. "The latest NCB services PMI makes good reading on this front," said NCB's Brian Devine.
New export orders have increased steadily over the past 18 months, falling just once. In February, orders increased at the fastest pace since June.
Not surprisingly, better orders means business confidence among service managers is at six-month high.
Earlier this week, data for the manufacturing sector showed new export orders rising at the second-fastest rate ever.
Across Europe both services and manufacturing sectors grew at a slightly lower pace in February than previously estimated, according to research by London-based Markit.
A survey of purchasing managers across the 17 euro countries recorded a PMI of 58.2, up from 57 in January, but less than the 58.4 estimate announced at the end of the month.
The service sector PMI increased to 56.8 in February, from 55.9 in the previous month. Manufacturing is growing faster across the eurozone.