Economy

Irish services growth ticks up to 3-month high in August -PMI

Euro strength may be impacting Irish exports

Growth in Ireland’s services sector inched up to hit a three-month high in August. Photograph: iStock

Tue Sep 5 2017 - 06:31

Growth in Ireland’s services sector inched up to hit a three-month high in August, a survey showed on Tuesday, but there were signs the strength of the euro may be impacting exports in the sector.

The Investec Services Purchasing Managers' Index (PMI) ticked up to 58.4 in August from 58.3 in July. It fell to a seven-month low in June of 57.6, but remained well above the 50 mark that separates growth from contraction.

The sector last fell below that mark in June 2012, when Ireland was halfway through a three-year bailout. Like the wider economy, services firms have so far proved very resilient to neighbouring Britain's decision to leave the European Union.

Growth in new export orders slipped to a three-month low in August, which the authors said may have been influenced by the strengthening of the euro. A slight contraction in financial services exports was the first decline recorded in the area since October 2012.

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“While recent FX moves are unhelpful for the Irish economy, our core view remains that the improving trends across most of Ireland’s key trading partners will be sufficient to deliver continued progress for the Services industry here,” Investec Ireland chief economist Philip O’Sullivan said.

He noted that while the subindex of expectations for business in 12 months’ time eased to its lowest level in 11 months, nearly eight times as many firms still expect to see growth in activity over the coming year as those who anticipate a decline.

(Reuters)

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