Ireland: Expansion in services PMI quickens in September
October 4, 2017
The Investec services Purchasing Managers’ Index (PMI) edged up from 58.4 in August to 58.7 in September. The result reflected faster expansion in activity, new orders and employment. With the slight increase, the index remains comfortably above the 50-threshold that separates expansion from contraction in the services sector, where it has been for over five years.
September’s figure reflects sharp increases over the previous month in business activity and new orders. Growth in business activity was buttressed by higher volumes of new orders and rising output. The increase in new orders was supported by improving market conditions along with increased client demand from Ireland and abroad. Increased capacity pressures pushed firms to increase staffing but was insufficient to stem an increase in backlogs of work. Regarding price developments, input costs and output prices increased in the surveyed month as service providers passed on higher costs to consumers.
Commenting on the expectations index, Philip O’Sullivan, Investec’s Chief Economist for Ireland, said:
“The forward looking […] index paints a very optimistic picture, with close to three-fifths of panelists expecting to see a rise in activity over the coming year and a low single digit percentage anticipating a decline.”