Ireland: Services PMI falls to seven-month low in August amid Brexit uncertainty
September 4, 2019
Business conditions in the Irish service sector softened slightly in August, reflected by a fall in the AIB service Purchasing Managers’ Index (PMI) to 54.6 from 55.0 in July, marking the worst print since January 2018. Nonetheless, the index remained above the critical 50-point threshold that separates improvement from deterioration in business conditions, signaling a continued strong expansion in the services sector.
August’s print reflected a slower rise in output and new orders, with some firms reporting a fall in UK orders amid ongoing Brexit uncertainty. Weaker demand conditions led firms to ease their intake of workers, which caused the job creation rate to slide to the lowest since May 2013. On the price front, higher fuel and utility prices lifted overall input costs, although the rate of input cost inflation slowed to a 33-month low. Despite the cost burden easing slightly, firms raised their output prices more rapidly in August in a bid to boost their bottom line. Looking ahead, business sentiment in August was markedly down from July and the weakest since December 2011, as Brexit uncertainty weighed on the outlook for activity.
Author: Nihad Ahmed, Economist