Ireland: Services PMI points to slower expansion in June
July 5, 2017
The Investec Services Purchasing Managers’ Index (PMI) dropped from 59.5 in May to 57.6 in June, a seven-month low. The result reflected a softer expansion in activity, new orders and employment. Despite the drop observed in May, the index posted solid growth and remains comfortably above the 50-threshold that separates expansion from contraction in the services sector, where it has been for over four-and-a-half years.
June’s slowdown reflects softer expansions in business activity and new orders. Business confidence also eased in June but remained above average on expectations of an improving economic outlook, business expansion plans and higher new order volumes. New business also increase, albeit at a slower pace, on the back of strong client demand while growth in new export orders picked up steam in the surveyed month. Staffing level in service firms increased buttressed by improving confidence of the economy. Regarding the latest price developments, the rise in input costs moderated while output prices rose sharply as service providers increased prices to improve profit margins.
Analyzing the latest PMI data, Philip O’Sullivan commented that, “taken together with Monday’s Investec Manufacturing PMI Ireland release, we now have a complete picture of how H1 went for much of the private sector in Ireland. The narrative is one of very solid overall expansion, with a slight improvement in Q2 in the growth rate for manufacturing and a marginal moderation in the rate of expansion for services.”