Ireland: Services PMI edges down in March
April 5, 2017
The Investec Services Purchasing Managers’ Index (PMI) edged down from February’s 60.6 to 59.1 in March. The result reflected a softer expansion in activity, new orders and employment. Despite the drop, the index remains above the 50-threshold that separates expansion from contraction in the services sector, where it has been for over four-and-a-half years.
Increased client demand and general improvements in economic conditions were chiefly behind the increase in business activity and new orders. Higher domestic and overseas demand resulted in the third monthly accumulation of backlogs of work and higher staffing in the surveyed month. In addition, anticipation of expansions in business plans contributed to higher employment by firms. Regarding price developments, input prices spiked on the back of higher employment, fuel and energy costs. Consequently, service providers passed on higher input costs to consumers.
The survey report went on to discuss the result of the forward-looking business activity outlook and commented that, “while dipping to a four-month low, the forward-looking Expectations index shows that services firms remain very upbeat on the sector’s prospects […]. This positive outlook is similar to the findings of Monday’s Investec Manufacturing PMI release, so we would be inclined to ‘look through’ the marginal decline in the rate of growth implied by this week’s PMIs and we anticipate stronger responses later in 2017.”