According to the AIB Purchasing Managers' Index (PMI) survey data for June 2023, Irish service providers registered a marked improvement in the health of the sector last month, with growth in new business remaining notable and underpinning a further substantial uplift in business activity.
AIB stated that the Services Business Activity Index was down last month to 56.8 from 57.0 in June, but remained above the neutral 50.0 threshold and was consistent with another marked uplift in activity levels
in the Irish service sector, and higher output levels reflected demand buoyancy, according to survey respondents.
Transport, Tourism And Leisure
According to AIB, companies that operate in the transport, tourism and leisure industry noted sustained, though weaker, expansions in both output and new orders last month.
AIB also stated that the level of outstanding work decreased for the first time since February, even though the job creation rate softening to a three-month low, and output charges decreased for the first time since February 2021 , even though there was an input rate pick-up.
Statement By AIB Chief Economist
AIB chief economist Oliver Mangan stated, "The AIB Irish Services PMI for June registered another very strong reading of 56.8, down slightly from 57.0 in May. This reading is consistent with a continuing robust rate of growth in business activity in the services sector. The Irish figure once again outperformed some of the major advanced economies, with the flash May Services PMI readings of 52.4 for the Eurozone, 53.7 in the UK and 54.1 in the US.
"The robust performance reflected strong demand in the sector. This was evidenced by another very solid increase in new business volumes at Irish services firms, driven by ongoing strength in both domestic and external demand.
"The combination of increased output levels and an expanding order book saw the sector record another solid rise in employment. The continuing strong growth in new business saw a further rise in the level of outstanding work. Meanwhile, firms in the service sector remained optimistic about their expectations for activity levels over the next 12 months, albeit not to the same extent as in the previous month.
"Financial services was the best performing sector in terms of output growth, for the first time in eight months, coinciding with a notable increase in new business. Meantime, technology media and telecoms lagged behind the other sub-sectors, experiencing a further loss of momentum in June.
"Inflationary pressures remained elevated in the services sector against the backdrop of continuing strong growth in activity. Indeed, both input and output prices saw a re-acceleration in their pace of increase."
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