Activity in the services sector increased last month as inflationary pressures eased, new data shows.
The latest AIB Purchasing Managers’ Index shows that activity expanded at its fastest pace since April 2023.
The index rose sharply to 58.3 in November, from 53.8 in October.
Readings above 50 indicate overall growth in activity.
The data shows that the rate of growth in the sector here was faster than the Eurozone, UK and US flash PMIs at 49.2, 50.0 and 57.0 respectively.
All four sub-sectors posted faster growth of business activity last month.
Financial Services was the best-performing area, while Transport, Tourism and Leisure once again posted the slowest rate of business activity expansion.
John Fahey, AIB Senior Economist said the expansion in activity was underpinned by strong demand conditions.
“New business rose at its fastest pace since March. Meanwhile, export orders improved for the fourth month in-a-row,” he said.
“The volume of outstanding work increased, albeit the rate of backlog build-up eased for a third consecutive month,” he added.
Cost pressures remained strong overall in November, however input cost inflation stabilised at among the lowest level for nearly four years.
This resulted in service providers raising their charges more slowly during the month.
The rate of charge inflation was the weakest since April 2021, but still above the long-run average.
Today’s data shows that the rate of job creation improved in November, after October recorded one of the slowest rates of employment growth over the last three years.
However, it remained weaker than than the average for 2024 so far and the long-run survey trend.
The strongest pace of hiring was seen in the Technology, Media and Telecoms sector.
In terms of the outlook for the next 12 months, service providers remain optimistic.
Around 40% of companies expect to increase business activity, while only 8% predict a decline.
However, overall confidence was weakest of the past two years, and below the long-run survey average.
Article Source – Activity in services sector rises as inflationary pressures ease – RTE
