Irish services sector expands, Brexit concerns ease

06 Jan 2020

Irish services The Irish services sector grew at the fastest pace in six months in December, as an increase in business confidence among firms was linked to reduced Brexit-related uncertainty.

This is according to the findings of a survey published on Monday.

A manufacturing activity slowdown in the EU’s fastest-growing economy had threatened to impact the services sector back in October, as a seven year-long run of uninterrupted growth had weakened to a near halt.

Nevertheless, the AIB IHS Markit Purchasing Managers’ Index (PMI) for services rallied for the second consecutive month to 55.9 from 53.7 in November, Reuters reports, above the 50 mark that divides contraction and expansion.

The recovery was fuelled by stronger domestic orders. The sub-index, which gauges business expectations, and which dropped to an eight-year low in September, increased to a 17-month high of 70.3 in December, from 66.4 the month before.

When broken down by sub-sector, the statistics showed that the Irish financial services sector outperformed in regard to total activity growth at the end of last year, with strong activity increases also reported in the technology, media and telecoms sectors, reports Irish Times.

In contrast, a decline was reported in the travel, tourism and leisure sector, which has endured a fall in UK visitor numbers for the fifth time in eight months.

Supporting the rally in total activity last month was a solid rise in new business, with new work increasing every month since August 2012.

Oliver Mangan, chief economist at AIB commented: “Overall this report indicates that the Irish services sector finished 2019 in very good shape, despite the challenges posed by Brexit uncertainty and weakening global growth.

“Nonetheless, the rate of expansion in the services sector in 2019 as a whole, though impressive, was the slowest since 2012, indicating that external headwinds did dampen activity somewhat last year.”

 

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