Ireland: Services PMI continues on downward trend in April
May 3, 2019
The Irish service sector seems to have lost momentum again at the outset of the second quarter, as suggested by a decline in the AIB service Purchasing Managers’ Index (PMI). The index fell to 54.7 in April, from 55.3 in March, amid a more challenging external backdrop and lingering Brexit-related uncertainty. April’s print reflected a softer expansion in service sector activity, although the index remained well above the critical 50-point threshold that separates improvement from deterioration, signaling that growth of the sector was solid.
Growth in output and new orders eased on weaker domestic demand conditions. New business expanded at the slowest pace in two-and-a-half years, with Brexit uncertainty the likely culprit weighing on sales. Consequently, firms saw backlogs of work climb at a slower pace, and the rate of staff intake also slowed. On the price front, input costs rose sharply, mainly on higher fuel and utility bills, which prompted service providers to raise output prices. Despite a continued fall in the index, business sentiment was more upbeat in April, thanks to an improved outlook on demand and investments. That said, April’s level of optimism was relatively meek compared to that in recent years, staying close to March’s six-and-a-half year low.
Author: Nihad Ahmed, Economist