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Ireland's private sector growth ebbed in April but remained robust on a continued expansion in new business, even as inflation concerns and the war in Ukraine continued to cast a shadow over confidence, data from S&P Global showed Thursday.
The AIB services purchasing managers' index dropped to 61.7 points in April from 63.4 points in March, marking the first slowdown in growth registered in 2022.
Three out of four sub-sectors reported an easing in growth for the month, but still remained above their long-run average. Only Media & Telecoms recorded a faster expansion than in March, but Transport, tourism & leisure continued to benefit from easing restrictions and a sharp pickup in demand.
Overall, employment levels increased in April, albeit at a slower pace compared to March, and helped to slow the rise in outstanding work. However, companies noted pressure on capacity and some firms reported a lack of resources to deal with demand.
Also, the survey recorded a deceleration in the rate of input price inflation compared to March, but it remained the second highest level on record, with pressure on costs remaining severe due to the war in Ukraine and Brexit.
In addition, business confidence picked up slightly since March, but was at the second weakest level since the first month of 2021.
‘There was another sharp rise in new business, including exports, as demand continued to strengthen, with employment growth remaining firm. Strong growth in activity was evident once more in all the four sub-sectors covered in the survey,’ said AIB Chief Economist Oliver Mangan.
‘The rebound in demand is putting growing pressure on operating capacity, with another significant rise in outstanding business in the month. Some firms reported a lack of resources to cope with the marked pick-up in demand. The Future Activity Index, though, remained below its long-run average as ongoing concerns around the war in Ukraine and high inflation dampened confidence about the 12-month outlook for activity,’ he added.
The services survey is sent to a panel of 400 firms with data collected between April 11 and 26.
The Ireland manufacturing purchasing managers index dipped to 59.1 in April from 59.4 in March, figures showed on Tuesday.
As a result, the composite PMI was at 59.6 points in April, down from 61.0 points in March but still remaining firmly in expansion territory.
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