Services sector records solid growth in October

Rising levels of output supported by a solid increase in new work drove growth in the sector. 

The Irish services sector recorded solid growth during October, despite falling back from its six month-high during September, on the back of rising levels of output and a solid increase in new work, the latest AIB Purchasing Managers Index (PMI) shows.

The PMI reading for the sector during October stood at 53.8 - down from the 55.7 reading recorded in September. A PMI is calculated from a series of questions that asks firms about the changes in the volume of business activity.

Any reading above 50 indicates growth in the sector.

According to the PMI, rising levels of output were supported by a solid increase in new work. Export sales also expanded at a particularly strong pace, with the rate of growth accelerating to its fastest since March.

“Higher levels of service sector output were linked to improving economic conditions and stronger customer demand in October,” the PMI said.

“Moreover, total new work increased at a slightly faster rate than in the previous month, with survey respondents often noting greater business and consumer spending.” 

However, margins nonetheless remained under pressure from sharply rising input costs, which resulted in more cautious staff hiring policies during the month.

Despite an increase in new orders, firms reported staffing numbers only increased marginally. Employment growth has been recorded in each month since March 2021, but the rate of job creation during October was the second-lowest seen over this period.