News

The Irish service sector companies have reported the strongest growth in business activity in July since August 2000, the latest AIB PMI survey reveals.

Incomplete workloads have increased the most in over two decades, despite the faster workforce growth. New business also expanded at its fastest rate since January 2016.

Charges by service providers rose the most in over five and a half years as rising inflationary pressures have been indicated.

The business activity index increased to 66.6 from 63.1 in June and 62.1 in May.

Oliver Mangan, Chief Economist with AIB said “This is the highest reading since August 2000 and the third month in a row that the index has been above 60. It points to a rapid rebound in services activity, driven by the release of pent-up demand as lockdown restrictions are gradually lifted.”

Compared with the UK and eurozone, the Irish reading is above the flash Services PMIs for July, with new businesses increasing at its quickest pace since January 2016. The UK and eurozone’s readings came in at 57.8 and 60.4.

However, growth in new export business is improving but still is not as strong. This is partially due to a continuing contraction in business from overseas in Transport and Tourism.

“The strongest growth was recorded in the Transport/Tourism/Leisure sector as hospitality starts to re-open. The pick-up in new business saw the volume of outstanding work rise at its fastest pace in over twenty years.” Mr Mangan said.

Notably, employment also posted another strong increase in July.

With input price inflation rising to its highest level since 2008, cost pressures will continue to increase, and prices charged to customers are escalating at their fastest pace in nearly six years.