Services Growth Accelerated In February, According To Latest AIB PMI Survey Data
According to the AIB Purchasing Managers’ Index (PMI) survey data for February 2022, a notable acceleration in growth was detected in the Irish service sector.
AIB stated that business activity growth quickened to a four-month high, as new business expanded the most in more than six years, and, consequently, outstanding work rose at one of the strongest rates on record and jobs were added to a greater extent, despite reports of labour shortages.
Input price inflation accelerated to the fastest in over 21 years, leading to one of the steepest rates of increase in service providers’ charges in the survey history, according to AIB.
Transport, Tourism And Leisure
According to AIB, transport, tourism and leisure (55.4) remained the weakest-growing sector, but growth in new work accelerated, with a notable pickup since January.
AIB stated, however, that recruitment was weakest in transport, tourism and leisure, and – in line with the recent trend – price pressures were most acute therein.
AIB also stated that the transport, tourism and leisure sector saw the strongest increase in new business in the four months in February, leading to the fastest overall growth in activity since last November. Exports, outstanding business and employment all increased following declines in January, and transport, tourism and leisure was the slowest-growing of the four monitored sectors, while it continued to see the steepest price pressures.
Statement By AIB Chief Economist
AIB chief economist Oliver Mangan stated, “The AIB Irish Services PMI picked up strongly in February, as the recovery from the pandemic gained momentum, following the lifting of Covid restrictions the previous month and [after] the Omicron variant retreated. The business activity index rose sharply, to 61.8 from 56.2 in January and 55.4 in December. Services PMIs picked up markedly in other countries as well in February. However, the Irish index was above the flash readings in the Eurozone, UK and US – of 55.8, 60.8 and 56.7, respectively.
“Most notable in the Irish survey was the sharp acceleration in the growth of new business, including exports, with improving economic conditions as the pandemic waned, boosting demand for services. This was evident across all four sub-sectors covered in the survey. Financial and business services registered the strongest growth in business activity in February.
“Despite a further rise in employment, the surge in demand saw the volume of outstanding business in the services sector rise at its fastest pace since 2000. This was also linked to staff shortages and supply difficulties. Firms in all sectors remained very optimistic on the 12-month outlook for business, with activity expected to gain further momentum as the pandemic recedes – in particular, tourism.
“Businesses continued to experience marked upward pressure on input prices, especially from higher labour and energy costs, but also fuel, insurance, shipping and UK customs. The rate of input price inflation was the fastest in more than 21 years. Meanwhile, the prices charged to customers also rose at the quickest pace since 2000. Price pressures were most acute in the transport, tourism and leisure sector.”
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