Election and construction sector eases service sector growth

Higher new business levels contributed to a further increase in activity at firms in the Irish service sector in May, according to the NCB Purchasing Managers’ Services Index.

Firms also reported that the launch of new products and services had contributed to the higher activity levels.

However, the rate of activity expansion eased considerably, as indicated by the seasonally adjusted Business Activity Index registering 54.9, from 58.1.

Although robust, activity growth was the weakest since August 2003.

Eunan King, Senior Economist at NCB Stockbrokers, said: "The rate of growth in the service sector eased in May but remained at a strong level.

"Employment, however, accelerated. The election and uncertainties in the construction sector were mentioned as factors adversely influencing activity. The May report is thus probably not a good guide to underlying activity and we would expect the removal of the election and stamp duty issues to support activity in the next few months."