Irish tourism and leisure businesses reported a seventh successive monthly decline in activity levels in September as cost pressures continue to dog the industry.
On Friday AIB published its latest purchasing managers’ index (PMI) for the wide-ranging services sector.
Based on a survey of some 400 businesses, the report suggests services businesses in the Republic experienced a strong return to growth in activity levels last month, adding jobs and increasing output.
The transport, tourism and leisure subsector continued to lag the other three covered by the survey – business services, financial services, and the technology, media and telecommunications subsector.
READ MORE
Business activity levels in transport, tourism and leisure continued to contract in September, AIB said.
Firms in this subsector also reported an acceleration of cost pressures in the month. However, the wider services sector also experienced a quickening of inflation in September, with AIB’s input prices index rising above its long-term average since 2000.
On a more positive note for the transport, tourism and leisure subsector, which has now contracted in seven successive months, the pipeline appears to be more promising than it has been this year.
Firms reported a slight rise in new business and improved outlook for the next 12 months, while employment in the subsector rose for the first time in three months.
[ Tourism Ireland spends €2.44m targeting ‘environmentally conscious’ visitorsOpens in new window ]
The latest CSO figures reveal 772,800 foreign visitors completed a trip to Ireland in August, an increase of 1 per cent when compared with the same month in 2024 and an increase of 5 per cent compared with August 2023.
However, while the number of US visitors has increased in 2025, visits to the Republic from Britain and Continental Europe have declined throughout the year amid economic headwinds.
Total visitor spend also slumped by 9 per cent year-on-year to €744 million, the CSO said.
The tourism industry has called for a range of supports in next week’s budget, aimed at reducing the cost of business.
Earlier this week the Association of Visitor Experiences and Attractions (Avea) said two-thirds of its members are reporting flat or reduced visitor numbers in the year so far.
Avea wants targeted support for SMEs to “offset the cost of doing business”, along with an extension of the 9 per cent VAT rate to attraction admissions.
Meanwhile, AIB chief economist David McNamara said the headline PMI for September showed a “rebound in growth” for the services sector after it lost some momentum in the early summer.
The headline index rose to 53.5 in the month, well above the neutral 50 threshold, which separates an expansion from a contraction in activity levels, and up from 50.6 in August.
“New business grew at an accelerating pace in September, underpinned by the sharpest rise in new export business since January,” he said.
“However, outstanding business declined again in September, reflecting the weakness in demand evident in recent surveys.”
Overall, the rate of growth in the Irish services sector outperformed the euro zone and the UK, Mr McNamara said.
