Ireland: Services PMI inches down from July's record-high
September 3, 2015
The Investec Services Purchasing Managers’ Index (PMI) inched down from July’s 63.4, which had marked the highest level in the survey’s history, to 62.1 in August. However, the index remains comfortably above the 50-threshold that indicates expansion in the services sector.
August moderation reflected a small setback in the business activity index compared to the previous month. Nevertheless, the index still continues to point to a solid expansion in the services sector. Business sentiment improved in August, reflecting continued improvements in the general economy and expected expansion in new business. Total new business recorded the 37th consecutive expansion, albeit growing at a slower rate than in the previous month, and new export business picked up pace in August. Backlogs of work rose again, resulting from increasing new orders. Employment growth sped up compared to July, approaching a record high. While input prices’ inflation moderated to the lowest level in half-a-year, it still remained fairly elevated, with price pressures emerging from higher staff costs and the weak euro. Output prices rose in August, albeit to a moderate extent.
According to the survey report, “the latest Investec Services PMI Ireland report shows that the rate of growth in activity remained sharp in August. […] It is clear that most services firms are positive on the outlook for the sector. Given the improving signs emanating from most of Ireland’s key trading partners and the upturn in the domestic economy, we share this optimism.”