Services sector shows strong growth
The seasonally adjusted Business Activity Index for February showed Irish service providers had maintained a strong rate of growth at their units during the month. The index was little changed compared to its January reading and, at 57.0, remained well above the 50.0 expansion/contraction point, signalling the ninth successive monthly improvement in overall levels of business activity.
NCB chief economist Dermot O'Brien said: "Services sector activity and optimism remain very buoyant, with new business growing strongly and signs of employment growth accelerating."
Firms among the 600 companies survey generally reported that employment growth had been necessary for them to keep pace with volumes of new business, a commentary accompanying the survey conducted by NTC research added.
"There were also some reports which showed that confidence about projected future growth had prompted firms to start hiring in anticipation.
"However, firms were also under pressure to balance the need for additional staff against the need to protect margins. With panellists facing sharply higher average costs, efforts to restrict employment growth were also common. In a number of cases, vacant positions resulting from retirements and resignations were simply left unfilled," the commentary added.
The data also indicates that inflationary pressure on costs remains intense.
"Cost pressures had again stemmed primarily from increased wages and salary bills, together with high fuel and energy costs," the survey authors said.
Charges levied by the service sector are also under pressure.
"A number of panellists indicated that price competition had been fierce, while there was also some evidence to suggest that charges had been lowered in order to keep euro-priced services competitive for clients operating in US dollars," the survey found.
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