Confidence up in Irish services sector

CONFIDENCE levels and business activity among Irish service industry firms rose in January — with activity advancing at the fastest rate in six months.

The latest monthly services sector purchasing managers’ index (PMI) from NCB Stockbrokers said that the improved weather conditions, after the pre-Christmas snow and ice, drove a solid rebound in business activity in the sector here (after a fall in December); adding that confidence among relevant businesses is up — with most services providers expecting economic conditions to improve over the year.

The driver of that upsurge in confidence — now at its highest level since September — comes from the renewed hope that export markets will remain a key source of growth over the year.

Fittingly, while new business order levels declined, albeit at a slower rate, in January, for the fifth month in a row new export business levels increased significantly, with Britain being a key source of work. New export business has now expanded in 16 of the past 17 months.

However, yesterday’s PMI also outlined some ongoing bad news; profitability among Irish service providers continue to decline over the three months to January — extending the current period of decline to 37 survey periods — and deteriorating more rapidly; and the level of job cuts also continuing. That said, the rate of job shedding in the area slowed last month and was only marginal.

NCB’s commentary was broadly positive: “Panellists expect to see an increase in new business over the coming year as economic conditions in Ireland improve. There were also some mentions of the forthcoming election, with companies forecasting that political stability would aid economic recovery.”