Ireland: Services PMI hits over two-decade high in July
August 5, 2021
The AIB services sector Purchasing Managers’ Index (PMI) rose to 66.6 in July, following June’s 63.1 print and logging the highest reading in over two decades. As a result, the index moved further north from the 50-threshold that separates expansion from contraction in business activity.
July’s climb was largely driven by the fastest expansion in new orders since January 2016. The sharp increase came one the back of solid foreign and domestic demand, particularly in the transport, tourism and leisure and technology, as well as media and telecoms sectors. Against this backdrop, service providers hiked their staffing levels for the fifth successive month in July, while business confidence firmed again, hitting an over four-year high.
Meanwhile, on the inflation front, higher wages and prices for fuel, shipping charges and insurance, as well as Brexit-associated costs resulted in a spike in input cost inflation, which accelerated at the sharpest rate since July 2008. As a result, service providers partially passed those costs on to consumers.
Author: Alexandros Petropoulos,