The technology sector continued to grow at a fast pace last month, despite fears over its future amid another wave of job losses.
The AIB Services Purchasing Managers Index showed the technology, media and telecoms sector recorded its fastest expansion since November and, at 58.8, kept its title as the fastest growing sector during June.
That followed a strong performance in May, and comes against a backdrop of job cuts at Meta, Oracle and TikTok. The latter confirmed this week it would cut jobs at its Irish office, with up to 300 redundancies being suggested.
Meta said it would shed up to 350 roles from its Irish workforce as part of a wider cull across the business, with heavy investment in artificial intelligence (AI) being blamed for much of the retrenchment.
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The tech sector data comes amid positive signs in the overall services sector.
The seasonally adjusted AIB Ireland Services Business Activity Index rose to 54.2 in June, up from 50.8 the previous month.
That was attributed to a recovery in demand, with delayed business coming through, leading to surging new business reaching its strongest rate in seven months despite uncertainty caused by the US war in Iran.
“The rate of growth in the Irish services sector was ahead of the flash Eurozone, UK and US PMIs at 48.9, 48.7 and 51.3 respectively,” AIB chief economist David McNamara said.
Although growth in total activity was at its fastest level since January, that was still below the long-run trend of 55. While the pressure from inflation was on the decline, overall costs remained high, weighing on employment and contributing to a slower rate of growth in jobs.
“Input-cost inflation eased from the 40-month peak reached in April and May, but remained historically elevated,” McNamara said.
“Rising supplier and freight costs, wage increases, fuel surcharges and energy costs were all factors cited by respondents in June.
“The rate of increase in prices charged also decelerated to a three-month low, but it, too, remained elevated in a historical context.”
Among individual sectors, financial services recorded its sharpest increase in four months at 55.3. Business services was more muted at 53.3.
Confidence in the transport, tourism and leisure sector increased as price rises slowed, but the sector remained below the 50 mark that separates expansion from contraction. That marked a fourth month of decline in a row, although the pace of decline moderated.
New business showed strong activity, with the survey recording the fastest rate of rise since last November. Technology, media and telecoms led the charge, with financial services following.
New export business also expanded sharply on the month as demand for Irish services from overseas markets improved.
“In terms of the outlook, business sentiment continued to recover in June, reaching a four-month high,” McNamara said.
“Confidence improved in all sectors except business services, with a potential peace agreement between the US and Iran boosting confidence.”
