Ireland: Services PMI drops in March to four-month low
The Investec services Purchasing Managers’ Index (PMI) declined from 57.2 points In February to a four-month low of 56.5 points in March. Despite the drop, the index remained comfortably above the 50-threshold that separates expansion from contraction in the services sector, where it has been for over five years.
March’s print came on the back of a softer expansion in business activity due to weather-related disruptions at the beginning of the month. New business also grew at a softer pace, with the overall increase primarily driven by growth in new export orders, which recorded its fastest expansion so far this year. Service providers continued to face capacity constraints as backlogs of work accumulated despite increased staffing. Regarding price developments, higher staffing costs and materials prices pushed input prices higher, and output prices rose to keep profit margins unchanged.
Commenting on the business expectations index, Philip O’Sullivan, Investec’s Chief Economist for Ireland, said:
“The forward-looking Confidence index slipped to a four month low last month, although we would caution against reading too much into this given that it may have been influenced by the since-departed weather issues. We are nonetheless pleased to see
the breadth of optimism across the sector, with all four of the segments that are captured by this release (TMT, Financial Services, Business Services and Transport & Leisure) simultaneously posting above-50 readings in this index for a 70th successive month in March.”