Private sector confidence soars

The private sector recorded its fastest growth since the heady days of the boom, according to NCB’s Purchasing Managers’ Index.

The index for the services sector rose to 56.8 in January from 55.8 a month earlier. Anything above 50 indicates growth.

It was the highest index reading since Aug 2007, a year before the financial crisis took hold.

NCB chief economist Philip O’Neill described the data as good news for the country and said will encourage employers to start hiring staff.

“We see that growth in new business remains healthy, with respondents reporting an improvement from both domestic and external markets during January,” said Mr O’Neill.

“We are encouraged to see that the rate of growth in new exports stands at the highest level since the series began in Jun 2002. These positive dynamics are encouraging employers in the services sector to take on more staff, with the employment index increasing at its fastest rate since Q1 2007.”

The survey found that the rate of job creation was sharp, and quickened to the fastest rate since Mar 2007. Twice as many companies took on staff as let them go as workloads rose, according to respondents.

The technology, media, and telecommunications sector posted the sharpest increase in staffing levels, followed by business services companies and financial services companies. The only sector to record a fall in staffing during the month was transport and leisure.

The increase in employment is being driven by a rapid increase in new export orders. More than 31% of respondents signalled a rise in new export business in January as a result of increased global demand.

However, despite the good news in employment and new business, profitability continued to fall.

A combination of higher input costs related to increased taxation, energy costs, and higher salary payments is eating into companies’ margins.