January saw the strongest recorded growth in new export business by the Investec Purchase Managers’ Index (PMI), which follows the seven-year export high recorded in December.
The growth in the export business was driven by strong demand from the US and the UK, with nearly 30% of respondents noting a rise in new export orders, against 9% that reported a fall.
Investec’s monthly Services PMI came in at 61.5, a little below the seven-year high of 61.8 recorded in December 2013.
Investec Ireland chief economist Philip O’Sullivan said companies had reported an improvement in new business orders.
“The latest Investec Services PMI Ireland report shows a bright start to 2014 for the services sector.
“The new business component recorded another strong reading during January, with respondents citing a general improvement in market demand.
“Unadjusted data for the four segments covered by the Services PMI once again show rising new business across all areas. Backlogs of work rose sharply during January and at a pace that was only marginally slower than December’s 81-month high,” Mr O’Sullivan said.
Another encouraging finding was that the increase in demand was resulting in a rise in employment.
The only downside to the survey was an increase in the cost of materials and labour, or input costs.
“Taking some of the gloss off this, however, was the average input prices component, where the pace of increase in input costs rose for a fourth successive month.
“However, rising volumes meant that the profitability component recorded growth for the seventh time in the past eight months. Last month we said that the sector had exited 2013 with a strong tailwind behind it,” said Mr O’Sullivan.
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