Ireland: Services PMI falls to over seven-year low in October
Business conditions in the Irish service sector weakened in October, reflected by a fall in the AIB service Purchasing Managers’ Index (PMI) to 50.6 from 53.1 in September. The index, thus, moved closer to the critical 50-threshold that separates improvement from deterioration in business conditions, with October’s print marking the worst print since August 2012.
Softer demand amid ongoing Brexit uncertainty caused business activity to lose steam and new order growth to slow an over seven-year low. Despite cooling activity, firms raised their rate of hire to deal with higher backlogs of works arising from new orders and investments in capacity. On the price front, higher fuel, insurance and staffing costs pushed up firms’ cost burdens. That said, the rate of input price inflation dipped slightly, thus prompting firms to raise output prices more softly. Lastly, on the outlook, while business confidence strengthened to a three-month high from September’s eight-year low, Brexit uncertainty continued to weigh on optimism, which remained subdued on the whole.