Ireland: Services PMI rises in February but remains in contractionary territory
The AIB services sector Purchasing Managers’ Index (PMI) rose from 36.2 in January to 41.2 in February. Consequently, the index continued to remain well below the 50-threshold that separates contraction from expansion in business activity.
February’s upturn largely reflected a more moderate decline in both business activity and new work. The transport, tourism and leisure sector again contracted the sharpest, albeit at a slower rate than January. Moreover, new business declined again, although at a softer pace, amid still-suppressed domestic and external demand, notably from the UK. These weak conditions also led firms to cut their workforce numbers for the 11th straight month. Regarding prices, although firms reported higher fuel, insurance, salaries and shipping costs, output charges were lowered in an effort to remain competitive. More positively, firms’ sentiment reached a 13-month high, driven by expectations for a resurgence in business once restrictions are lifted as vaccination campaigns take hold.