Concerns over international trade cloud recovery in Irish services sector

AIB Services PMI finds growth in the Irish services sector outperformed the Eurozone, UK, and US

Concerns surrounding international trade continue to linger despite a partial recovery in the services sector, the latest AIB Services Purchasing Managers Index (PMI) said.

Concerns surrounding international trade continue to linger despite a partial recovery in the services sector, the latest AIB Services Purchasing Managers Index (PMI) said.

The AIB Irish Services PMI for May indicated an acceleration in growth in the sector, with the index rising to 54.7 from 52.8 in April, driven by stronger new business growth and a recovery in output expectations, albeit outstanding business and employment growth both eased.

A reading above 50 indicates an overall increase compared to the previous month, and below 50 indicates an overall decrease.

“Overall, the rate of growth in the Irish services sector outperformed the eurozone, UK, and US flash PMIs for May, at 48.9, 50.2, and 52.3 respectively,” said AIB chief economist David McNamara.

Both new business and export business increased during the month, although export growth was more subdued. 

Growth of business activity at Irish service providers strengthened in May, reflecting a pick-up in new work inflows. The rate of expansion was the second-fastest in 2025 so far and in line with the 2024 average.

Three of the four services sub-sectors expanded in May. Technology, media, and telecoms (59.1) recorded the fastest expansion of business activity in May, followed by business services (56.0) and financial services (54.2).

Transport, tourism, and leisure (47.0) registered a third successive monthly decline in activity and at the fastest rate since October 2023.

Transport, tourism, and leisure also posted a decline in employment for the first time since August 2024.

The rate of growth in new business recovered in May, having slowed to a weak pace in April. That said, the seasonally adjusted New Business Index remained below its long-run average.

Cost pressures eased notably in financial services, with technology, media, and telecoms — the only other area to record a slower increase than in April.

The AIB Ireland Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies.