Ireland PMI October 2020

Ireland

Ireland: Services PMI improves, but remains in negative territory in October

November 4, 2020

The AIB services sector Purchasing Managers’ Index (PMI) rose to 48.3 in October, from 45.8 in September. However, the index remained below the 50-threshold that separates contraction from expansion in business activity for the second consecutive month.

October’s reading largely reflected a continued decrease in activity—albeit at a softer pace than in September—as new business contracted due to frail demand conditions amid renewed Covid-19 restrictions and increased uncertainty. The overall level of outstanding business fell for the eighth month running, pushing firms to cut staff levels again, albeit at a slower rate compared to the previous month.

On the price front, input costs rose in October due to higher freight charges and costs related to remote working adjustments. As such, firms increased output charges for the second month straight and at a quicker pace than in September. Lastly, although the outlook was positive in October, sentiment slipped to the weakest level since May largely owing to increased uncertainty over the evolution of the pandemic and its related restrictions, as well concerns over a no-deal Brexit.

FocusEconomics Consensus Forecast panelists project fixed investment to contract 5.8% in 2021, which is down 0.2 percentage points from last month’s forecast. For 2022, the panel sees fixed investment growth at 3.7%.


Author:, Economist

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Ireland Services PMI October 20 20

Note: Investec Services PMI. Readings above 50 indicate an overall increase in business activity compared to the previous month, and below 50 an overall decrease.
Source: AIB and IHS Markit.


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