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.”