Service sector growth sees 67-month high

Service sector businesses recorded the sharpest growth of business activity for 67 months in April, according to the NCB Purchasing Managers’ Index.

More than two-fifths of companies noted a rise in activity, which the majority linked to higher new business volumes.

Expansion of activity has now been recorded in each month since June 2003.

April data also suggested an increase in Irish service providers’ degree of optimism since March, moving to a level in line with February’s 11-month high.

Plans for business expansion and marketing campaigns over the coming year contributed to a number of firms’ confidence.

Services companies registered a strong rise in input costs since March, however. Cost inflation was the most marked since October 2005, with a number of firms commenting that salary increases were

provided as part of efforts to hold on to key staff.

Many firms also mentioned higher fuel costs in the survey, which uses a panel of around 600 regularly participating companies to monitor trends in business conditions in the private sector services economy.