'Robust' services economy boosted by foreign tourists

Tourists visiting Hook Lighthouse in Churchtown, Co Wexford. Picture: Andy Gibson

The services section of the Irish economy experienced "robust" growth in May, helped by a surge in foreign tourists, the latest monthly survey tracking the economy has shown.

The AIB Purchasing Services Managers' Index showed that services output was still expanding sharply, and outpacing growth in the rest of the eurozone and in Britain, and recruiting more staff. 

"May was notable for a sharp increase in activity and strong growth in new business, including from abroad, in all of the four sub-sectors covered in the survey," said Oliver Mangan, chief economist at AIB, in a commentary on the findings. 

In particular, there was a very marked pick-up in the transport/tourism/leisure sector, helped by a surge in visitor numbers from overseas." 

The output of services is expanding across many national economies in Europe, even as manufacturing contracts as factories struggle to come to terms with inflation and higher interest rates. An AIB survey published earlier this week showed that last month saw Irish manufacturing contract by its sharpest rate for three years. 

In services, price pressures are still bearing down on the sector, "with the continuing strong growth in activity, inflationary pressures remained elevated in May" although at a moderating rate, Mr Mangan said.