Weak growth recorded in services sector in July, says AIB's Purchasing Managers' Index

Growth maintained but at marginal rate

July saw weak growth in the Irish services sector with activity only marginally higher, according to the latest AIB Services Purchasing Managers' Index (PMI) data. Picture: iStock

July saw weak growth in the Irish services sector with activity only marginally higher, according to the latest AIB Services Purchasing Managers' Index (PMI) data.

The seasonally adjusted AIB Ireland Services Business Activity Index fell to 50.9 in July, from 51.5 in June, signalling a marginal rate of expansion and the weakest since January 2024, though growth was maintained.

"Overall, the rate of growth in the Irish services sector underperformed the eurozone, US, and UK flash PMIs," said AIB chief economist David McNamara.

Activity and new business rose marginally, and expectations remained subdued despite improving since June, the survey said, with a slight rise in employment and the volume of outstanding business little-changed in the month. "Cost pressures eased to a 10-month low, while prices charged by service providers increased at a rate unchanged on June's four-year low," the survey said.

Transport, Tourism, and Leisure registered a fifth successive monthly decline in activity, but at a slower rate. Technology, Media, and Telecoms grew but recorded a much slower expansion, while Business Services and Financial Services posted modest growth. "Weaker growth of business activity at the start of the third quarter mainly reflected a further slowdown in new business expansion," the report said.

Irish service providers were more optimistic of growth of total activity at their units over the next 12 months.  Growth forecasts were linked to new products, investment and pent-up infrastructure demand. By sector, expectations for activity were strongest in Financial Services and weakest in Transport, Tourism, and Leisure.