Service sector growth picks up in February, PMI survey shows

March 6, 2024

The service sector here grew at its fastest pace in five months in February after slowing to a near standstill a month earlier, as firms reported rising levels of new business across all sectors, a survey showed today.

The AIB Global S&P Purchasing Managers’ Index (PMI) rose to 54.4 from 50.5 in January.

The index has stayed above the 50 mark separating growth from contraction since March 2021 and comfortably so throughout 2023 at an average rate of 55.5.

The bounce back in February was partly driven by new export orders, particularly from Europe, which rose at the sharpest pace in six months. Employment also increased.

Taken together with a recovering manufacturing sector, which is growing at the fastest pace since mid-2022, the composite PMI measuring private sector output hit a 12-month high last month.

Data last week showed that growth across the domestic economy slowed to 0.5% last year, far below the 2.2% expected by the country’s finance department, following a fall in investment and flat consumer spending in the final quarter.

Finance Minister Michael McGrath said he expected the recent easing of inflation to support households this year, however today’s PMI data showed an acceleration in services’ price growth for a fourth straight month.

While still well below the mid-2022 peak, input prices and prices charged rose at their fastest rates in 10 and 12 months, respectively, the survey showed.

Wages were the key driver of inflation, with fuel also highlighted by transportation firms, the survey’s authors said.

Transport, tourism and leisure recorded the strongest input price inflation of the four sectors measured, but the weakest charge inflation, they added.

Article Source – Service sector growth picks up in February, PMI survey shows – RTE

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