Services growth at its weakest since 2013

A leading indicator for the economy recorded its slowest pace of growth since May 2013 in a warning sign ahead of Britain’s exit from the European Union.

The AIB Ireland Composite Purchasing Managers Index headline reading dropped to 54.2 at the start of 2019, down from 56.3 in December.

While a reading over 50 still signals an expansion, the survey showed that a dip in new orders had prompted service sector employers to cut back on headcount expansion, which recorded its slowest expansion in 10 months.

“It suggests that growth in the Irish economy is likely to slow this year, which is hardly surprising given the loss of momentum in the global economy in recent times,” said AIB chief economist Oliver Mangan.

Behind the slowdown in the pace of Irish private sector output growth were weaker rises in both manufacturing production and services activity. Both grew at their slowest rates in 10 and 68 months respectively.

Official forecasts are all for a decline in economic growth, with the Central Bank forecasting a 4.5pc expansion this year, with an agreed Brexit.

A cliff-edge Brexit in which UK leaves without a deal could cut that rate substantially, to just 1.5 pc, the Central Bank warned in its latest quarterly economic survey.

Still, even in the event of a no-deal Brexit, Ireland’s would still be at the better end of performance in the euro area where many of the largest economies are either in recession or flirting with it.

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