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The strongest growth for Ireland’s service providers in almost a year gave a boost to the country’s entire private sector last month, with input cost inflation easing to a 20-month low, survey results on Friday showed.
The AIB Ireland services business activity index rose to 58.2 points in February from 54.1 in January, well clear of the neutral 50-point mark that separates expansion from contraction.
This marked two consecutive years of monthly improvement in the Irish service sector, index compilers S&P Global said, and was the highest reading since May last year.
While input cost inflation fell to its lowest in 20 months, output charge inflation picked up in February from the 16-month low seen in January. S&P Global said survey respondents blamed higher labour costs for the need to pass on increased operating expenses to customers.
‘Inflationary pressures remain strong in the services sector,’ commented AIB Chief Economist Oliver Mangan. ‘Businesses continued to report upward pressure on wages, as well as transport and energy costs, though the rate of increase in input prices eased somewhat further to a 20-month low.’
The composite purchasing managers’ index - which combines service and manufacturing sector survey results - rose to 54.5 points in February from 52.0 in January.
Released on Wednesday, the Ireland manufacturing PMI rose to 51.3 points last month from 50.1 in January, trailing the service sector reading but still in expansion territory.
The services PMI is compiled by S&P Global from the responses to surveys sent to 400 service providers in Ireland, with data collected in the second half of each month.
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