Services sector activity rebounds resolutely in September

It is the sector's fastest growth since May

Three of the four services sub-sectors recorded growth last month with transport, tourism and leisure the only one to see a contraction. 

The Irish services sector recorded a strong “rebound in growth of activity” with output and new business increasing at the fastest rates in four months, the latest AIB Purchasing Managers’ Index (PMI) for the sector shows.

For September, the services sector had a PMI reading of 53.5 — up from the 50.6 recorded in August signalling a robust rate of expansion and the fastest since May. The PMI is based on a survey of firms with any reading of 50 or above denoting growth in the sector over the previous month.

Chief economist at AIB, David McNamara, said the sector saw new business grow at an “accelerating pace in September” which was “underpinned by the sharpest rise in new export business since January”.

“However, outstanding business declined again in September, reflecting the weakness in demand evident in recent surveys.” 

The services sector is divided into four sub-sectors with technology, media, and telecoms being the best performer with a PMI reading of 60.9.

Solid growth was also recorded in the business service and financial services sectors with readings of 52.3 and 52.2 respectively. However, transport, tourism and leisure registered a decline in activity for a seventh consecutive month with a reading of 48.6.

All four sub-sectors recorded positive job growth in September. Mr McNamara said firms were “increasingly optimistic” on the prospects for expansion in activity levels over the coming 12 months.

“Confidence was linked to new products, customers, and a pick-up in international demand, including from the US and UK,” he said.