Ireland PMI December 2017


Ireland: Services PMI jumps in December

January 4, 2018

The Investec services Purchasing Managers’ Index (PMI) rose from 56.0 in November to 60.4 in December, pushing the indicator to its best reading since April 2017. The index remains comfortably above the 50-threshold that separates expansion from contraction in the services sector, where it has been for over five years.

December’s increase was driven by a faster expansion in business activity, new orders and employment. Favorable economic conditions resulted in a surge in new orders, particularly from overseas markets. Staffing levels increased in December and resulted in increased capacity pressures among service providers. In spite of this, backlogs of works accumulated at the fastest pace in almost two years. Regarding price developments, higher employment costs pushed input prices higher and resulted in an increase in selling prices.

Commenting on the business expectations index, Philip O’Sullivan, Investec’s Chief Economist for Ireland, said:

“The forward looking Business Activity: Expected Levels in 12 Months’ Time index improved to its highest since September, which is unsurprising given the increase in New Orders and the generally improving international backdrop.”

FocusEconomics Consensus Forecast panelists expect fixed investment to grow 6.8% in 2018, which is up 1.2 percentage points from last month’s forecast. For 2019, the panel sees fixed investment growing 4.9%.

Author: Jean-Philippe Pourcelot, Economist

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Ireland PMI Chart

Ireland Services PMI December 2017 0

Note: Investec Services PMI. Readings above 50 indicate an expansion in the services sector while readings below 50 indicate a contraction.
Source: Investec and IHS Markit.

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