Ireland: Services PMI continues to rise in June
July 3, 2020
The AIB services sector Purchasing Managers’ Index (PMI) increased to 39.7 in June from 23.4 in May. Although the rise hinted that the most severe blow to business had passed in June as lockdown measures started to be lifted, the index still remained well below the 50-threshold that separates contraction from expansion in business activity.
June’s result was largely driven by softer declines in business activity and new work compared to the previous month amid continued subdued demand. This, coupled with a high degree of uncertainty regarding the severity and duration of the blow to demand, led firms to cut staff levels in June. The rate of job shedding was the slowest in three months, however. On the price front, input prices fell for the third consecutive month amid lower labor costs; however, the rate of the decline in input prices was slower than in May. Moreover, output charges also fell at a softer pace compared to the previous month. Lastly, although the 12-month outlook improved considerably in June, sentiment among firms remained historically muted.
Author: Hanna Andersson, Economist