Services sector growth belies further job losses

Despite the services sector of the economy returning to growth in February, job losses in the sector continued, according to the latest NCB services PMI.

NCB Stockbrokers chief economist Brian Devine said the NCB services PMI signalled that activity expanded in February (53.3 from 48.3).

“This is a welcome development given the weak house price and retail sales data in January. Both new business (53.5) and new export business (55.2) expanded on the month, but employment continues to decline. Ultimately employment growth will be required for there to be a meaningful recovery in the Irish economy, and to date this is still elusive across the economy and also within the services sector (47.9),” he said.

The survey notes that service providers lowered their employment levels in February, as they have in each of the past 10 months.

“However, the rate of job cuts was only modest, having eased to the weakest in three months. Those respondents that recorded a drop in employment over the month linked this to a combination of redundancies and staff leaving voluntarily. In a number of cases, departing employees had not been replaced. Close to one-fifth of panellists reported a reduction in staffing levels, compared with around 15% that posted an increase,” the survey states.

The February data pointed to divergences between the four sectors covered by the survey, with two raising employment levels and two cutting jobs.

“Staffing levels decreased at financial services and transport and leisure, with rates of decline remaining solid in each case. That said, the latest falls were each the slowest in three months.

“Technology, media and telecoms continued to raise employment in February, extending the current sequence of job creation to four months. The modest increase in staffing levels was broadly in line with that seen in the previous month. After nine successive falls, business services companies raised employment in February. That said, the rate of growth was marginal,” the survey found.


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