Ireland: Services PMI rises in January
February 5, 2020
Business activity in the Irish service sector continued to accelerate in the first month of the year, as reflected by the AIB service sector Purchasing Managers’ Index (PMI) rising to 56.9 from 55.9 in December. The index, thus, moved further above the critical 50-threshold that separates expansion from contraction in business activity, signaling growth in the services sector and marking the best reading since in seven months.
January’s reading reflected a rise in business activity, which quickened for a third consecutive month, while new business growth jumped to the highest reading since December 2018 amid an uplift in new enquires and stronger UK business. Although firms raised staffing levels in January, backlogs of work rose at the fastest rate since June 2019. On the price front, input cost inflation remained strong as input prices rose amid higher fuel and labor costs in January. Meanwhile, output charge inflation eased somewhat from December, but remained high nonetheless. Regarding the 12-month outlook, business sentiment strengthened to the highest reading in a year-and-a-half as service providers turned more optimistic amid the removal of Brexit uncertainty.
Author: Hanna Andersson, Economist