Services growth slows for second month in a row – PMI
More than a year of rapid growth in Ireland’s services sector moderated slightly for the second successive month in May as selling prices and input costs remained close to record highs, a survey showed today.
The AIB S&P Global Purchasing Managers’ Index (PMI) fell to 60.2 from 61.7 in March.
But the index stayed above the 50 mark separating growth from contraction for the 15th consecutive month as the sector recovers quickly from the initial Covid-19 shutdowns.
The series has been above the 60 mark for all bar five of those months, a run last seen in 2015 when a recovery from the 2008 global financial crisis that hit Ireland particularly hard began to pick up steam.
The May reading was also comfortably ahead of the flash readings for the euro zone as a whole and Britain of 56.3 and 51.8, respectively.
The transport, tourism and leisure category continued to record the fastest increase in activity in Ireland last month, while the rate of job creation across the whole sector grew to a 10-month high.
Inflation was also most pronounced among transport, tourism and leisure firms, today’s survey shows.
Around two-thirds of all respondents noted a rise in input prices during the month amid widespread reports of increased fuel and wage costs.
“The rebound in demand continues to put pressure on operating capacity, with another significant rise in backlogs of outstanding work in all four sub-sectors,” AIB chief economist Oliver Mangan said.
“The future activity index, though, remained below its long-run average, as has been the case since the Russian invasion of Ukraine and resulting increased uncertainty about the economic outlook,” he added.