Ireland: March services PMI shows strong growth
The AIB Ireland Services Purchasing Managers’ Index (PMI) rose to 56.6 in March from 54.4 in February. As a result, the index moved further above the 50.0 no-change threshold, and signaled a faster improvement in services sector operating conditions compared to the previous month.
There were significant increases in total activity and new business, with both growing at the fastest rate since last July. This surge in activity and new business inflows was supported by notable increases in export business, particularly from the UK and Germany. Additionally, service providers continued to expand their workforces in response to the stronger demand, although the rate of job creation slightly eased from February’s eight-month high. Financial services led the growth among the subsectors, followed closely by business services; transport, tourism and leisure; and technology, media and telecoms.
Despite the overall positive growth trends, the report highlighted ongoing inflationary pressures, with both input price and charge inflation remaining above their long-run trends, albeit easing since February. The sources of rising prices included labor costs, utilities, and fuel. Moreover, while the 12-month outlook for activity in the Irish service sector remained positive, overall confidence dipped to a six-month low, and remained below the long-run trend.