Employment in the technology, media and telecoms sector rose at its steepest rate for a year in May despite job losses at Meta in the month and fears of a wider tech cull, new data from AIB shows.
The bank’s latest PMI report on the services industry shows business activity in technology, media and telecoms enjoyed the fastest expansion in activity (54.1) of any sector despite seeing growth ease since April. Any figure above 50 indicates growth.
It registered slower growth of business activity and new business, but remained the fastest expanding sector on both variables. Input cost and charge inflation both eased, but remained “relatively high”. The year-ahead outlook “improved further,” AIB said.
Social-media giant Meta cut up to 350 Irish jobs in the month, which equated to about 20 per cent of its workforce here. The number was significantly higher than the initial 10 per cent expected, causing alarm in Government.
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Tech companies globally have been cutting jobs as they seek to meet the changes the roll-out of artificial intelligence is expected to bring, but Ireland is in the firing line more than most given many leading tech companies have large operations here.
While no formal indication has been given to Government by the tech companies that more job cuts are coming, it is understood that industry figures have privately warned Ministers and officials that as many as 80 per cent of tech jobs globally could be lost over the coming decade.
More generally, the seasonally adjusted PMI figure for the services industry rose back above the no-change mark to 50.8 in May, from 49.7 in April. The latest figure signalled only a marginal rise in activity, however, remaining well below its long-run trend of 55.
The 12-month outlook for activity improved to a three-month high, with companies reporting anticipated increases in demand, expansion into new markets, new business opportunities and ongoing business development efforts.
Sentiment remained relatively subdued, however, reflecting “geopolitical uncertainties and rising costs”.
Higher input prices were linked to rising fuel costs, wage and salary pressures, supplier price increases and broader inflationary trends linked to geopolitical tensions.
Companies said higher costs were passed on to customers as charges were raised sharply in May. The rate of charge inflation eased from April’s two-year high, however.
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AIB said there were fresh increases in both total activity and new business volumes in May, following mild declines in April. Having risen steeply in March and April, input price inflation steadied in the latest period, leading to a slower rise in charges.
That said, inflationary pressures remained relatively high, especially in the transport, tourism and leisure sector. Employment increased at a faster rate as business activity expectations improved, but overall confidence levels remained subdued.
The business services sector (53.8) registered its sharpest increase in activity four months, while financial services (52.2) posted a renewed increase in activity following a decline in April. Transport, tourism and leisure (40.1) registered a sharp decline.
Having been broadly flat in April, the volume of new business received by Irish service providers increased. The rate of growth was the fastest in three months, but still subdued by the survey’s historical standards.
New export business across the service sector as a whole rose, having declined for the first time in 10 months in April. The level of outstanding business held at Irish service providers was broadly stable in May, having declined in April at the fastest rate since February 2021.
