Business activity growth continues
The monthly Purchasing Managers' Index (PMI) registered 57.0 last month, which was comfortably ahead of the 50.0 benchmark that represents the difference between positive and negative territory. But the index was marginally lower than the 57.3 recorded last month and the 58.1 seen in August, which suggested that positive sentiment was weakening.
NCB chief economist Dermot O'Brien, who published the monthly survey, said the signs remained good and that employment and confidence in the services sector were growing.
"Growth in service sector activity remains robust and confidence is running at a high level. The fact that employment growth strengthened in October is a very positive sign," he said.
The research covered purchasing managers at 600 service companies in the private sector.
NCB said the continued increase in activity reflected buoyant economic conditions and strong domestic and foreign demand. But there was a risk that aggressive price cuts, rather than more benign conditions, were behind recent growth in demand.
Firms surveyed reported increases in overall staff numbers for the fourteenth month in a row, a factor which NCB said reflected the rate of improvement in new business.
Businesses also reported fresh pressure on costs as oil prices continued to rise and workers looked for higher pay, which both added to input costs. Margins were squeezed in many cases as firms failed to pass on these extra costs to customers by hitting them with higher prices. Only two of the four sectors surveyed business services and transport and leisure showed evidence of higher average charges for customers.
