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Services sector sees nine months of growth in a row

IRELAND's services sector grew for a ninth consecutive month in April, according to new figures.

The good news tempered poor figures from the manufacturing sector earlier in the week.

The rate of expansion quickened to the sharpest since January, according to NCB stockbrokers.

But conversely, separate figures show production for manufacturing industries for March was down 2.7pc on February and 6.2pc when compared with March last year.

On the positive side, NCB economist Philip O'Sullivan said new export business recorded its 21st successive month of expansion during April, although the pace fell to an eight-month low.

"Unsurprisingly, it was mainly non-Eurozone markets that were cited as areas of particular strength during the month," said Mr O'Sullivan.

"Buoyed by this export strength, new business recorded a ninth successive increase.

"Given increased workloads, it is no surprise that employment stayed above the key 50 'no-change' level for an eighth successive month, with all four sub-sectors signalling a rise in staffing levels."

The latest NCB Services Purchasing Managers Index, which measures the overall health of the Irish services sector, shows the headline rate stands at 55.2.

A figure over 50 means the sector is expanding, while under 50 means it is shrinking.

Mr O'Sullivan said one disappointing aspect of the results was that the pricing environment remains difficult.

Output prices stayed in negative territory, as they have done in every month since August 2008.

Businesses have cited strong competition and efforts to stimulate demand as the main reason for this.

Input prices continued their upward march, as they have done in every month since December 2010, with increased energy prices cited as a source of pressure in this area.

Mr O'Sullivan said he expected the positive trends to continue over the coming months.

"In all, this is a positive release that reflects the ongoing resilience in the Irish services sector," he said.

"Indeed, last year was the first on record in which Ireland's services exports exceeded goods exports."

Separately, the Central Statistics Office (CSO) said production for manufacturing industries for March was 2.7pc lower than in February.

On an annual basis, March production was dropped 6.2pc when compared with the previous March.

The so-called modern sector, made up of a number of high-technology and chemical sectors, showed a monthly decrease in production of 4.7pc.

There was also a monthly drop, of 0.3pc, in the traditional sector.

Irish Independent