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The services sector in Ireland expanded at its fastest rate in nearly a year and was entirely responsible for an improved picture for the overall economy, according to purchasing managers’ index survey results released by S&P Global on Thursday.
The AIB services business activity PMI index rose to 58.4 points in April from 55.7 in March. Last month’s score was the best in 11 months and the 26th month in a row it was above the 50-point no-change mark, S&P noted.
Survey respondents said higher output reflected further improvement in demand.
The strong services sector single-handedly boosted the composite PMI output index to 53.5 points in April from 52.8 in March. Released on Tuesday, the manufacturing PMI slipped to 48.6 points last month from 49.7 in March, due to cutbacks in production.
While supporting the overall Irish economy, the buoyant services sector also is generating price pressure.
‘With the pace of growth in activity accelerating in April, inflationary pressures remained elevated across the services sector,’ commented Oliver Mangan, chief economist at survey sponsors AIB.
‘Businesses continued to report upward pressure on input costs, in particular wages. The rate of increase in cost inflation did ease to a near two-year low, but remains steep. Increases in operating costs continue to be passed on in higher prices to customers, with the rate of increase in selling prices showing little change in recent months, remaining at a high level.’
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