Services sector less upbeat

Optimism amongst Irish services sector firms has dipped despite business activity enjoying a third consecutive month of growth in April.

The technology, media and telecoms (TMT) sector has led the way for the services industry in recent times, according to the NCB Services PMI (purchasing managers’ index).

The latest edition of that index, issued yesterday, shows that firms in the TMT area have seen business increases in eight of the last nine months.

“All four broad sectors covered in the survey (TMT, travel/tourism, financial services and business services) saw an increase in new business with financial services rebounding strongly after a fall in new business in March. Technology, media and telecoms — which has been the leading sector — saw new business expand only marginally in April, but it still represented the eighth increase in the last nine months. TMT has also been the leading light on the employment front and April was the sixth month in a row that TMT firms expanded staffing levels,” said Brian Devine, chief economist with NCB Stockbrokers.

The overall activity index remained unchanged at 52.1 points in April, but was still comfortably over the 50 point mark which separates an industry in decline and one in growth mode. The confidence index, however, slipped slightly — from 70.4 points to 64.1 points, but many companies still expect new export business to support growth.

Both new business and new export orders grew amongst services firms during April, while employment levels remained unchanged. This followed on from a modest rise in job numbers in March.

Meanwhile, profits at Irish services firms decreased in April “at a solid pace”, according to the survey, and at a quicker pace from the last edition of the index.

Bloxham Stockbrokers said the broadly positive result of the NCB survey showed “another sign that the Irish economy is heading in the right direction.”