Thursday 22 February 2018

Services sector continues strong rate of expansion with export demand up

Irish hotels and other areas performing well.
Irish hotels and other areas performing well.
Colm Kelpie

Colm Kelpie

Ireland's all-important services sector continued its strong rate of expansion last month, with new export orders rising sharply, a survey has found.

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.

And firms 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.

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.

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