Irish service sector recovers at faster pace in August

A slight decrease in activity was registered in Transport, Tourism & Leisure sector following strong growth in July. File Picture: Getty

Activity in Ireland's services sector grew for the second straight month in August, and at a slightly faster pace despite repeatedly stalled moves to fully reopen the economy.

The AIB Purchasing Managers' Index (PMI) for services rose to 52.5 from 51.9 in July, marking its second month back above the 50-point line denoting growth, having sunk as low as 13.9 in April.

It was still some way below February's two-year high of 59.9, however, when the pandemic began to impact Ireland.

While new business among Irish firms grew for the first time since February last month, the survey's authors cautioned that demand remained subdued with little sign of a substantial pickup in still contracting export orders.

The strongest expansion was in Business Services, closely followed by Technology, Media & Telecoms (TMT) which recovered from a dip in July. A slight decrease in activity was registered in Transport, Tourism & Leisure following strong growth in July, while Financial Services activity fell solidly having also risen the previous month.

"The sub-components of the survey highlight that the recovery in activity still has quite some way to go. Only two of the four sectors covered showed activity expanding, while financial services and transport, tourism and leisure activity contracted," AIB Chief Economist Oliver Mangan said.

"Meanwhile, new orders remained at subdued levels, largely due to continuing weak foreign demand. The weakness in export orders was evident in all four service sub-sectors," he added.