Services sector grows at fastest rate in nine years

Ireland’s services sector grew at its fastest rate in nine years in June driven by increases in new business and prices charged.

Investec’s latest Purchasing Managers’ Index of activity in services, which covers businesses from banks to hotels, stood at 63.3 in June, up from 61.4 in the previous month, beating the eight-year high of 62.6 posted in December last year.

Some 38 per cent of panellists in the services sector registered a rise in activity during the month, compared with 8 per cent reporting a decline. Retail and tourism were among the strongest.

Around 60 per cent of respondents forecast an increase in activity over the coming 12 months. Just 5 per cent predicted a decrease.

“Given the improving signs around both the key export markets for

services firms based here and the domestic economy, we believe that this optimism is well-founded," Investec Ireland chief economist Philip O'Sullivan said. The new business sub-index hit its highest level in six months, climbing to 63.7 from 63.0, although new export business declined marginally.

The main services index has stayed above the 50-point line that separates growth from contraction since July 2012.

Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.

REUTERS