Ireland: Services PMI drops to over one-year low in August
September 5, 2022
The AIB Services Purchasing Managers’ Index (PMI) came in at 54.7 in August, down from July's 56.3. August's result marked the weakest reading since March 2021. As such, the index remained above the 50.0 no-change mark, pointing to a continued, albeit moderating, improvement in private sector business conditions from the previous month.
August’s deterioration—the fourth in five months, leading the PMI to fall below its long-run average—came as demand continued to moderate. This was linked to inflation and a slowing UK economy. More positively, weaker demand—aided by continued job hiring—appeared to ease supply constraints and thus price pressures, with input and output inflation hitting six-month lows.
AIB’s Oliver Mangan commented on the business outlook:
“Overall business confidence in services, though still quite positive, weakened somewhat from July reflecting concerns about rising inflation and a potential recession.”