Ireland: Services PMI
May 10, 2016
The Investec Services Purchasing Managers’ Index (PMI) dropped from 62.8 in March to 59.8 in April, the lowest point since February 2014. Despite the drop, the index remains well-above the 50-threshold that indicates expansion in the services sector. The PMI has been in expansionary territory for the last 45 months.
April’s reading mainly reflects softer expansions of new business and business activity, which grew at the slowest pace since February 2014. New orders rose for the 45th consecutive month, albiet at a slower growth rate. Growth in new orders came on the back new business from new and existing clients. Economic conditions improved in April but output was weighed by greater political uncertainty. Service firms continued to increase their staffing levels for 44 months running. Regarding price development, input prices rose on the back of higher employment costs while output costs rose as well since service firms passed on higher input costs to consumers.
According to the survey report, “growth in New Business slowed to a 26 month low in April, with some panelists reporting that political instability had led to delays in contracts being confirmed. We understand that this relates to a combination of the EU referendum in the UK and the drawn-out process around the formation of a new government in Ireland since the general election held on February 26.”