Ireland: Irish Services PMI drops to over two-year low in September
October 6, 2016
The Investec Services Purchasing Managers’ Index (PMI) nosedived from 59.7 in August to 56.2 in September, the lowest reading since February 2014. The result reflected a softer expansion in activity, new business and employment. Despite September’s drop, the index remains above the 50-threshold that separates expansion from contraction in the services sector, where it has been for over four years.
September’s reading reflects a sharp drop in business sentiment, which declined to the lowest value in over three years. Growth in new business slowed for the fourth consecutive month and the rate of expansion was the softest since May 2013. Expansion in new export orders also grew at the lowest rate in six months. Outstanding business rose for the 40th consecutive month, though the increase was only modest. Owing to slower growth in business activity and new business, staffing by Irish services firms rose at the slowest pace in 40 months. Regarding price developments, input costs and output prices both increased in the survey month.
According to the survey report, “taken together, the latest Investec Manufacturing and Services PMI Ireland reports indicate a weakening in the rate of growth in activity across much of Ireland’s private sector compared to what was seen in the first half of the year. With further uncertainty around Brexit and the US Presidential election expected between now and the year end, we are growing increasingly cautious about the prospects for Q416."