Ireland: Services PMI eases in October

The AIB Services Purchasing Managers' Index (PMI) came in at 53.2 in October, down from September's 54.1. October's result marked the worst performance since February 2021. As a result, the index remained above the 50.0 no-change threshold, pointing to a continued, albeit moderating, improvement in services sector operating conditions from the previous month.

October’s deterioration—the sixth in seven months, bringing the services PMI further below its long-run average—came as demand continued to decline amid the cost of living crisis. The transport, tourism and leisure industry continued to weigh on the services PMI in the month, dipping deeper into contractionary territory. That said, there were silver linings: Employment rose sharply; service providers reported rising inflows of new business; both input and output inflation eased; and the services PMI print compares favorably with those seen in the Euro area, the UK and the U.S. Meanwhile, business sentiment rose to the highest level since July.

FocusEconomics Consensus Forecast panelists see private consumption expanding 1.8% in 2023, which is down 0.3 percentage points from last month’s forecast. In 2024, the panel projects private consumption growth at 2.5%.