Services activity growth has slowed to lowest this year
October 4, 2023
The growth in activity in the services sector was the slowest since the beginning of the year, according to the latest AIB Ireland Services Purchasing Managers Index.
Concerns over the impact of higher interest rates and cost pressures weighed on the outlook, although it did remain positive.
“Indeed, it was the lowest reading since January, though still consistent with ongoing good growth in services activity. This is in marked contrast to some of the major advanced economies,” said Oliver Mangan, AIB Chief Economist.
“The business services activity index has now expanded for 31 straight months and despite weakening in September is only just below the long-run trend level.”
The technology, media and telecoms sector led the growth, with lower rates of expansion in financial services and business services.
However, transport, tourism and leisure registered a third successive decline.
The PMI showed that new business volumes continued their expansion in September, but at the weakest level since December of 2022.
But despite this, the volume of outstanding work at service providers continued to increase.
“The solid performance by the Irish services sector in September reflects ongoing healthy growth in new business, both from domestic and export customers,” Mr Mangan said.
This led services firms to grow their workforces again, with the rate of job creation broadly in line with the strong long-run trend and broad-based by sector, despite being among the slowest registered over the past two years.
In terms of the outlook, the respondents indicated that they were strongly positive overall.