Growth in service sector slows in March
Growth in the country’s service sector slowed in March, according to the latest AIB Services Purchasing Managers’ Index (PMI).
The data shows that the rates of increase in activity and new business moderated.
The business activity index stood at 55.7, down from 58.2 in February.
Readings above 50 indicate overall growth in activity.
The Irish figure is closely in line with the flash March Services PMI for the euro zone of 55.6, but above the readings for the UK and US of 52.8 and 53.8, respectively.
A further improvement in demand reportedly supported the increase in service sector activity at the end of the first quarter of the year.
Intakes of new business across the Irish service sector increased steeply in March, but at a slightly slower pace than in February.
Growth in demand from overseas clients was also sharp.
Today’s report shows that the year-ahead outlook for output fell to its lowest level.
But on a more positive note, employment growth accelerated.
However, there were reports of difficulties in sourcing and retaining staff.
At the same time, rates of input price and output charge inflation, though still steep, eased to 21 and 18 month lows, respectively.
“While the pace of price increases eased in March, inflationary pressures remained elevated throughout the services sector,” said Oliver Mangan, Chief Economist with AIB.
“Businesses continued to report upward pressure on prices across a broad range of inputs, in particular wages and energy bills,” he said.
“Higher costs continue to be passed on in higher prices to customers, with the rate of increase in selling prices still steep, despite falling an 18-month low,” he added.
The data shows that companies remained upbeat about the outlook for the next 12 months.
However, the level of confidence slipped to a three month low amid some concerns about future demand.