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Ireland's service sector flourished in July, survey data showed on Thursday, with businesses across the sector enjoying growth.
The headline services business activity index rose to 56.3 in July from 55.6 in June. Any figure above 50.0 indicates expansion.
AIB noted July's print was the seventeenth consecutive monthly rise in services output.
‘Growth was broad-based across the four monitored sectors in July. Technology, media & telecoms was at the foot of the rankings and the only monitored sector to register a weaker upturn compared to July. At 51.4, the respective seasonally adjusted index signalled only a marginal rate of increase,’ AIB continued.
‘Elsewhere, business services recorded the strongest expansion for three months in July - at 55.6 - with activity growth also accelerating to a sharp pace in transport, tourism & leisure - at 56.2. The quickest expansion was seen in financial services - at 61.9 - where growth was the fastest since April and marked overall.’
The services PMI growth follows a ‘challenging’ month for manufactures, as output struggled to keep up as new orders slump.
As a result, the seasonally adjusted composite output index inched higher to 52.9 in July from 52.8 in June.
Oliver Mangan, AIB chief economist, said: ‘The AIB Irish services PMI for July showed
a re-acceleration in the pace of growth in the sector, in marked contrast to most other countries.
‘It points to continuing strong growth in services activity. By comparison, the flash July services PMIs fell in the Eurozone, UK and US to 50.6, 53.3 and 47.0, respectively, which are well below the Irish reading.’
Mangan noted Ireland's strong number in July was still below the May reading of 60.2.
‘In terms of the main components of the Irish survey, growth in new business remained strong, with the rate of increase in new export business picking up to a four-month high amid stronger client demand,’ he continued.
‘As a result, July registered another significant increase in backlogs of outstanding business as pressure on capacity rose further. Meanwhile, there was yet another marked rise in employment, continuing the trend evident in the first half of the year.’
AIB noted surveyed firms continued to experience ‘severe upward’ pressure on input prices - with fuel, materials and labour costs the main culprits.
Mangan added: ‘The higher costs are being passed on to customers, with the rate of increase in prices charged matching the survey peak hit in April.’
The AIB Ireland services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies. The data was collected between July 12 to 26.
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