Ireland: Irish Services PMI drops to over-two-year low in July
August 3, 2016
In July, the Investec Services Purchasing Managers’ Index (PMI) plunged from 61.2 in June to 59.5, marking the lowest reading since February 2014. Despite the drop, the index remains well above the 50-threshold that indicates expansion from contraction in the services sector. The PMI has been in expansionary territory for four years.
July’s drop reflected a deterioration in client sentiment following the UK’s decision to leave the EU on 23 June. Nevertheless, business confidence improved in July due to increased optimism over improvements in economic conditions and business expansion plans. Strong client demand and new business from abroad were behind a rise in new orders during the surveyed month. Regarding price developments, input costs and output prices both rose in July, albeit at a slower pace.
According to the survey report, “the report shows a slight weakening (for a second successive month) in New Business, although approximately twice as many panelists reported a rise in new business last month as those that posted a fall. Somewhat surprisingly (given the ‘Brexit’ vote) the New Export Business index expanded at a faster pace than in the previous month, although the strength in new orders here appears to have come from Continental Europe and Asia.”