Activity in service sector hits seven-month low in October
Employment growth remains strong and reaches 10-month high
Employment growth accelerated for the fifth successive month in October, to reach a 10-month high, according to the IHS Markit Ireland Services purchasing managers’ index.
Growth in the Irish services sector eased during October, amid a slowdown in the rate of expansion in new orders and strong inflationary pressures. Job creation, however, picked up to a 10-month high.
According to the IHS Markit Ireland Services purchasing managers’ index, headline business activity index fell from 58.7 in September to 57.2 in October, the weakest rate of growth since March.
Activity across all of the four sectors covered by the survey rose, with the sharpest increase among firms in the technology, media and telecoms sector.
Although new business rose at a marked pace during October, it was the slowest pace in seven months. Volumes of new work from abroad continued to increase strongly, albeit at a slower pace than in September.
Employment growth was particularly strong, accelerating for the fifth successive month in October, to reach a 10-month high. Anecdotal evidence from panellists indicated that an increased level of customer orders and investment encouraged them to hire additional staff.
Both input prices and output charges increased at quicker rates during October. Charge inflation accelerated to the joint-highest mark in seven months. Firms reported passing on increased business costs such as insurance rates to customers.
Looking forward, the survey points to Irish service providers being optimistic regarding activity over the coming year, with expectations of increased customer orders as well as an improving Irish economy were stated as reasons behind optimism.