Growth in services sector slows for sixth month in a row

AIB found that, during October, only two sectors in the services industry recorded growth — the technology, media, and telecoms sector and the financial services sector. 

The rate of growth in the services sector continued to slow for the sixth month in a row as the volume of new business rose only “fractionally” and international demand declined, a new report from AIB shows.

The AIB Ireland Services Business Activity Index showed that only two of the four monitored sectors registered growth in October — technology, media, and telecoms with an index of 59.7 and financial services with an index of 57.7.

The business services sector’s index stood at 48.7 while a much faster contraction was seen in transport, tourism, and leisure whose index dropped to 43.2.

During October, the index dropped to 52.6 from the 54.5 recorded in September.

The index is calculated from a question that asks for changes in the volume of business activity compared with one month previously. A reading above 50 indicates an overall increase compared to the previous month while below 50 marks a decrease.

AIB chief economist Oliver Mangan said this latest PMI marks the sixth consecutive fall in the index, “pointing to a marked slowing in the pace of expansion in services”.

This is in line with the trend in most other economies.” 

Mr Mangan said the marked slowing in new business is of “particular concern”.