Ireland: Services PMI shoots up in January
February 3, 2016
The Investec Services Purchasing Managers’ Index (PMI) surged from December’s 61.8 to 64.0 in January—the strongest expansion since June 2006. The index is now further above the 50-threshold that indicates expansion in the services sector. The PMI has been in expansionary territory for the last 42 months.
January’s reading mainly reflects an increase in business activity, new business and business sentiment as firms expect further improvements in economic conditions and business activity in 2016. The rate of expansion of new business also accelerated in January and resulted in an increase in new orders and new export orders. Increased new orders contributed both outstanding business and workloads rising. This, in turn, encouraged Irish firms to increase operating capacity and to hire more employees. Meanwhile, input prices rose as staffing costs increased. Consequently, output prices increased for the 22nd consecutive month.
According to the survey report, “a key highlight within the report is the New Business component, which strengthened to its joint-fastest level since August 2000. Irish services companies have consistently reported growth in New Business for three-and-a-half years now. Further comfort can be gleaned from the fact that all four segments of the services sector that are captured by this report (Business Services, Financial Services, TMT and Transport & Leisure) simultaneously posted growth in New Business for a 32nd successive month. We also note that the rate of growth in New Export Orders quickened in January, a reassuring outcome given the less supportive international backdrop.”