Confidence levels increase among services firms

Confidence levels among the country’s services-related companies increased last month, despite growth in the sector easing to a three-month low.

The latest Services PMI (purchasing managers’ index) from Investec showed a reading of 62.1 points for August.

Although its weakest reading since May, the sector has now been consistently growing for more than three years.

Growth in new business levels remained strong (new orders have risen in 37 consecutive months) and new export orders increased at a faster pace than in July.

The rate of job creation within the sector was among the fastest on record last month and employment within the services industry has now been in expansion mode for three years.

Hiring was done on the back of increased work orders.

Overall sentiment among companies reached a three-month high in August, with nearly 20 times as many firms indicating that they expect to see a rise in activity over the coming 12 months, compared to those predicting a decrease.

“It is clear that most services firms are positive on the outlook for the sector,” said Investec Ireland chief economist Philip O’Sullivan.

“Given the improving signs emanating from most of Ireland’s key trading partners, and the upturn in the domestic economy, we share this optimism.

“We see clear indications that Irish services firms remain upbeat on the prospects for the sector. Firms continue to see strong demand from customers, both at home and abroad.

“The rate of expansion implied by the New Export Business component picked up to its fastest pace in seven months, with panellists citing the US and UK as the key sources of rising demand.”


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