Irish services sector growth hits 25-month high: PMI survey

DUBLIN (Reuters) – Ireland’s services sector grew at its fastest pace in over two years in February on strong new orders, a survey showed on Wednesday, though the outlook for growth over the next 12 months softened slightly.

The AIB IHS Markit Purchasing Managers’ Index (PMI) for services rose to 59.9 from 56.9 in January, well above the 50 mark that separates growth from contraction.

“The robust expansion in service activity is being driven by strong growth in new business,” said AIB Chief Economist Oliver Mangan, adding that new exports orders, which had weakened a lot in 2019, had picked up considerable strength.

However, “buoyant business conditions would appear to be leading to increasing cost pressures in all service industries,” he said.

An easing of uncertainty around Brexit has helped solidify seven years of uninterrupted growth in the Irish services sector over the past few months.

But the authors said concern was beginning to emerge about Britain’s future trade settlement with the European Union and political deadlock following an national general election on Feb. 8.

Those concerns helped nudge the Business Expectations subindex, which measures the outlook for the coming 12-months, down a three-month low of 68.4 from 71.1 in January.