The Irish services sector exhibited resilient growth in September, despite a mild drop in the business activity index to 54.5, according to AIB. The report, released on Wednesday, highlighted an increase in new business across service providers.
This performance contrasted with the contraction observed in the euro zone. Financial services and business services sectors showed modest expansion, while the technology, media, and telecoms sectors recorded robust activities. On the other hand, the transport, tourism, and leisure sectors reported a decline.
Simultaneously, a survey conducted by S&P Global revealed a slowdown in Ireland's private sector growth during September. This deceleration was evident despite the strong performance of the services sector as per the AIB services purchasing managers' index (PMI). The index experienced a slight fall from August to September, marking its weakest point since January. Furthermore, the composite PMI, which encompasses both services and manufacturing sectors, also reported a downturn. In particular, the manufacturing PMI entered contraction territory according to S&P Global's Monday report.
Data collected from 400 Irish service providers between September 12 and 26 indicated healthy growth in new business from both domestic and export customers. It also unveiled robust employment growth, a significant rise in outstanding work volume, and optimistic future business expectations.
However, challenges persist in the form of cost pressures arising from high inflation and slow job creation rate due to a lack of qualified candidates. The volume of outstanding work rose sharply, suggesting potential strain on resources. High interest rates are expected to impact demand negatively, while rising input and output prices continue to burden firms.
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