Ireland: Services PMI rises again in April
The AIB services sector Purchasing Managers’ Index (PMI) rose to 57.7 in April from 54.6 in March. As a result, the index landed comfortably above the 50-threshold that separates contraction from expansion in business activity and logging the best result in 14 months.
April’s rise was largely driven by increasing output—the highest since February 2020—, as well as a broad-based improvement in new orders, amid higher domestic and foreign demand. Notably, new exports orders expanded at the second joint-fastest rate in nearly three years, supported by firming demand in the EU and UK. This, coupled with markedly higher activity expectations in the 12 coming months, prompted firms to increase their staffing levels, albeit only marginally, as employment in the transport, tourism and leisure sector remained unchanged. Lastly, on the price front, input cost inflation softened somewhat, despite still-high price pressures. As a result, businesses hiked their selling prices, with output charges growing the fastest rate since the pandemic’s outbreak in February.
Oliver Mangan, AIB chief economist, said:
“The sub-sector data show improving conditions in the four industries covered in the survey. They all saw a pick-up in new business for the first time since the pandemic began, including in the hard hit Transport, Tourism & Leisure sector. However, all four continue to experience a severe margin squeeze, with further sharp increases in input costs, but only limited ability to pass these on in higher prices.”