Ireland: Services PMI picks up in March
The S&P Global Services Purchasing Managers’ Index (PMI) came in at 63.4 in March, up from February’s 61.8. As a result, the index moved further above the 50.0 no-change threshold, signaling a faster improvement in business conditions compared to the previous month.
The continued boost from the end of Covid-19 restrictions meant that new and outstanding business rose sharply despite the war in Ukraine causing firms’ year-ahead output expectations to decrease markedly, at a rate only exceeded in September 2001—following the 9/11 attacks—and in March 2020—following the global outbreak of Covid-19. As a result, despite the PMI remaining at record levels, some moderation of the PMI ahead is likely. Cost pressures rose at the fastest rate on record in March, pointing to the effect of the war on global commodity prices.
AIB’s chief economist Oliver Mangan highlighted the increasing pressure placed on supply capacity:
“There was further strong growth in new business, including exports, while employment rose at its quickest pace since August. The rebound in demand is putting growing pressure on operating capacity, with the volume of outstanding business rising at its fastest pace since 2000. This was also linked to COVID-related staff absences and supply difficulties.”