Irish services sector grows for 19th month in a row in February

Ireland’s services sector grew for the 19th month in a row in February and companies were at their most optimistic in a decade, according to a new survey .

The Investec Purchasing Managers' Index of activity in the services sector, which covers businesses from banks to hotels and accounts for 70 per cent of economic output, came in at 57.5 in February.

That was down from 61.5 in January but still far above the 50 line that divides expansions in activity from contractions.

The sector has grown every month since July 2012, but the expansion has slowed from December, when the index hit its highest since February 2007.

Even so, Irish companies were markedly more optimistic about the future with nearly 65 per cent of those surveyed forecasting higher activity in 12 months’ time, versus 5 per cent expecting a fall.

“One of the most striking aspects of this release is the expectations component. Optimism among Irish services companies strengthened to the highest level recorded by the series since January 2004,” said Investec Ireland chief economist Philip O’Sullivan.

The subindex for new export business among firms fell to 60.6 from 64.9, but marked the 31st straight month of growth.

Ireland’s usually robust export sector has been struggling due to the mixed picture in Europe and the expiry of patents among the large cluster of drugs companies located in the country.

Reuters