Irish services sector growth hits three-month high in May
The services sector continued to expand in May, growing at the fastest pace in three months, new data revealed.
The Investec Purchasing Managers’ Index of activity in the sector, which includes businesses ranging from banks to hotels, grew to 61.4 in May from 60.6 a month earlier, above the 50-point line that separates growth from contraction. The latest figures brings the current run of growth to 34 months in a row.
New orders showed a substantial increase during the month, particularly in the UK and US as the fall in the euro against the dollar and sterling.
“According to respondents, improving economic conditions was a key factor behind the latest rise in activity, enabling companies to secure greater levels of new business,” Investec Ireland chief economist Philip O’Sullivan said. “Within the report, we see that demand is on the rise both at home and abroad.”
The index showed the rate of expansion in the incoming new business index picked up the pace to the sharpest since February, with new export business still in positive territory.
Staffing levels at firms continued to rise, with May showing the fastest pace of job creation this year. Despite this, backlogs of work continued to rise.
Input price also rose during the month, driven by higher wage costs and the weakness of the euro against sterling and the dollar. That helped boost output prices, although the rise was the weakest in three months.
Separately, the Central Statistics Office said the seasonally adjusted monthly services value index fell by 0.6 per cent in April 2015. In the year to April 2015, the index showed a rise of 3.7 per cent.
In the month, the biggest movers were general services, which rose by 5.7 per cent, accommodation and food service activities, which increased by 2.5 per cent, and professional, scientific and technical activities, which fell by 5.9 per cent. The value index for administrative and support service activities was down 4.7 per cent.
In the year, the main movers were broadly similar, although wholesale and retail trade rose almost 12 per cent, and information and communication fell by 5.2 per cent over the 12 months.