The country’s services sector posted its fastest growth in five months in June as an easing of geopolitical uncertainty and lower inflation boosted activity, a survey showed today.
The AIB S&P Global Services Purchasing Managers’ Index climbed to 54.2 in June from 50.8 in May after dipping below the 50 level that separates growth from contraction in April.
“Higher activity was attributed to a catch-up in demand following a period of geopolitical uncertainty,” AIB’s chief economist David McNamara said in a statement.
“Activity levels were boosted by rising outstanding and new business, alongside easing inflationary pressures,” he said.
He also noted that the rate of growth in the services sector here was ahead of the flash euro zone, UK and US PMIs at 48.9, 48.7 and 51.3, respectively.
New business increased at the strongest rate in seven months, while the volume of outstanding business rose for the first time in three months.
Input cost inflation eased from the 40-month peak reached in April and May but remained elevated, the survey showed.
“Rising supplier and freight costs, wage increases, fuel surcharges and energy costs were all factors cited by respondents in June. The rate of increase in prices charged also decelerated to a three-month low, but it too remained elevated in a historical context,” David McNamara said.
“In terms of the outlook, business sentiment continued to recover in June, reaching a four-month high. Confidence improved in all sectors except Business Services, with a potential peace agreement between the US and Iran boosting confidence,” he added.
Today’s survey showed that Technology, Media & Telecoms remained the fastest-growing sector in June, with the strongest expansion since last November.
Financial Services registered the sharpest increase in four months, while Business Services posted a softer rise in activity.
Meanwhile Transport, Tourism & Leisure registered a fourth successive monthly decline, but at a slower rate than seen in previous months.
