According to the AIB Purchasing Managers' Index (PMI) survey data for January of 2022, the survey's data indicated faster services economy growth in the first month of the year as confidence improved.
Transport, Tourism And Leisure
AIB stated that its latest PMI survey data signalled renewed growth in the areas of transport, tourism and leisure, which was driven by the domestic market, and that cost pressures were elevated, however, the input price inflation rate dropped to a six-month low, while charges rose at the softest rate since September of 2021.
According to AIB, activity in the areas of transport, tourism and leisure rose last month following a decline in December, but at a modest pace, and new work in the transport, tourism and leisure sector rose in January following a slight decline the previous month, but was the weakest of the four monitored sectors.
AIB noted that the 12-month outlook for services activity as a whole was at its strongest since May of 2021, and that the overall strengthening in demand reflected the domestic market, as international new business increased at the slowest rate in 11 months, and there was a further marked decline in the areas of transport, tourism and leisure.
According to AIB, the level of outstanding business at services providers increased last month, and the growth rate accelerated since December, but transport, tourism and leisure were the only areas that recorded a decline.
The areas of transport, tourism and leisure were also the only areas in which a decrease in job creation was recorded for the first time since March of last year, according to AIB, and the areas of transport, tourism and leisure registered the fastest increases average input prices and charges last month.
Statement By AIB Chief Economist
AIB Chief Economist Oliver Mangan stated, "The AIB Irish Services PMI picked up in January, having registered a marked decline in the final two months of last year. A key factor seems to have been the lifting of COVID restrictions, which boosted confidence. The business activity index rose to 56.2 from 55.4 in December. This is in contrast to the trend in other countries where Omicron weighed on the sector. The flash January Services PMI readings for the Eurozone, UK and US fell to 51.2, 53.3 and 50.9, respectively, well below the Irish level.
"The acceleration in the pace of growth was evident across all four sub-sectors covered in the survey. Business services was the best performing, while transport/tourism/leisure returned to growth as COVID restrictions were removed. There was a pick-up in new business in all four sub-sectors, although there was a further decline in export business in transport/tourism/leisure.
"Despite a further strong rise in employment, the level of outstanding business in the services sector rose further in January. This was partly linked to staff absences due to COVID and ongoing supply chain difficulties at a time when demand was strengthening. Meanwhile, firms in all sectors remained very optimistic on the 12 month outlook for business, with activity expected to pick up further momentum as the pandemic recedes.
"Businesses continued to experience marked upward pressure on costs for fuel, wages, energy, insurance, transport, and purchased goods. While input prices continued to rise sharply, the rate of increase was nonetheless the lowest in six months. Meanwhile, the prices charged to customers also continued to rise, though again at their slowest pace in four months."
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