Ireland: Services PMI inches up in July to new record-high
August 6, 2015
The Investec Services Purchasing Managers’ Index (PMI) inched up from June’s 63.3 to 63.4 in July, the highest level in the survey’s history. As a result, the index moved further above the 50-threshold that indicates expansion in the services sector.
July’s marginal improvement largely reflected that business activity and new business grew at the fastest pace in several years. According to the survey report, firms linked these rises to strengthening economic conditions. New export orders also rose, boosted by a weak euro, and the rate of job creation accelerated in July as well. Backlogs of work continued to increase on the back of rising new business. Meanwhile, input cost inflation quickened for a third consecutive month, reaching the highest level in over six years. However, while output prices continued to increase in July, their rate of inflation fell to the lowest since February.
According to the survey report, “the latest Investec Services PMI Ireland report reveals that Irish services companies continued to record strong growth of activity during July. […] Looking ahead, […] it is clear that services firms in Ireland retain a high degree of optimism on the outlook for their sector. Given the improving dynamics around the domestic economy (last week’s national account’s release revealed that Irish GDP was +6.5% y/y in Q1 2015, while domestic demand rose 4.2% y/y in the same quarter) and the continued tailwind to exports from favourable FX moves, we believe that this positivity is well founded.”