Ireland PMI May 2021

Ireland

Ireland: Services PMI jumps in May

June 3, 2021

The AIB services sector Purchasing Managers’ Index (PMI) jumped to 62.1 in May from 57.7 in April, logging the best reading since March 2016. As a result, the index landed comfortably above the 50-threshold that separates expansion from contraction in business activity.

May’s upturn was largely attributed to the strongest expansion in new business in over four years as the easing of lockdown restrictions released pent-up demand despite moderating new export orders. Against this backdrop, service providers turned notably more confident amid hopes of higher inflows of new work following the pandemic’s end. Improved business expectations prompted firms to increase their staffing level with employment in the technology, media and telecoms as well as business services sectors rising markedly. Meanwhile, building price pressures stemming from higher costs for fuel, insurance, transportation and Brexit-associated costs pushed input cost inflation to an over 12-year high in May. In response, services providers sought to pass their costs on to customers, but only partially.

FocusEconomics Consensus Forecast panelists project fixed investment to contract 5.5% in 2021, which is unchanged from last month’s forecast. For 2022, the panel sees fixed investment growth at 6.8%.


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Ireland Services PMI May 2021

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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