Services sector sees strong growth as input costs ease

Input price inflation moderated to the lowest level since February 2021.

Activity in the Irish services sector increased at the strongest rate in six months during September as orders grew and cost pressures eased, the latest AIB Purchasing Managers Index (PMI) shows.

The PMI registered a reading of 55.7 last month, with any reading above 50 indicating an increase in activity. This is the second fastest rate of expansion in over a year and up from the August reading of 53.8.

Chief economist at AIB David McNamara said overall Irish firms reported strong growth in new business, and this was linked to both domestic and export demand.

“The volume of outstanding work also rose at a solid pace in the month,” he said.

Input price inflation moderated to the lowest level since February 2021.

The level of new business continued to rise in September but at the slowest rate in three months.

Across all the four service sub-sectors, activity rose with technology, media, and telecoms recording the highest reading at 58.6.

Overall business confidence regarding activity growth over the next 12 months improved.

This confidence was linked to new products and services, stronger demand, lower interest rates, and the release of pent-up demand in the economy.