Ireland Services PMI

The AIB Ireland Services PMI decreased slightly to 57.1 in December 2024 from November's 19-month high of 58.3. The latest reading indicated a sustained sharp rise in services activity, marking the second-strongest growth since April 2023, with the index remaining well above the long-run trend level of 55.1. All four sub-sectors posted strong growth, led by transport, tourism, and leisure. New orders grew at the fastest rate since March, with foreign sales rising at the quickest pace in over a year and a half. In response, firms increased employment at the fastest pace in four months. On prices, input cost inflation accelerated to a seven-month high due to higher wage costs, while output cost inflation also rose, remaining above the long-run average. Lastly, business sentiment improved to a ten-month high, driven by new projects and business opportunities.

The AIB Ireland Services PMI increased to 58.3 in November 2024 from October’s 53.8, pointing to the fastest expansion in the sector since April 2023. The latest reading also marked the largest increase since February 2022 amid improvements in demand conditions. Expansion across sectors was supported by a solid increase in new work, rising the most since March, with foreign sales advancing at the fastest pace in eight months. New business remained strong, with all four sub-sectors posting faster growth, led by financial services. In response, employment continued to increase since March 2021, though the pace of job creation was the weakest in the current ten-month sequence of expansion. On prices, input cost inflation stabilized at the lowest level for nearly four years. As a result, output cost inflation eased to the weakest since April 2021. However, business sentiment was slightly less optimistic and was among the weakest of the past two years and below the long run. .

The AIB Ireland Services PMI dropped to 53.8 in October 2024, down from September’s six-month high of 55.7, amid an easing in output growth. Expansion across sectors was supported by a solid increase in new work, with foreign sales rising at the fastest pace in seven months. New business remained strong, with technology, media, and telecoms as the fastest-growing sectors, while transport, tourism, and leisure were the weakest. As a result, employment has continued to increase since March 2021, though the pace of job creation was the second slowest during this period while backlogs of work rose at the slowest pace in three months. On prices, input cost inflation accelerated from September's 43-month low, driven by rising fuel costs and salary payments, while output inflation advanced to a three-month high, widely attributed to the need to alleviate margin pressures. Lastly, sentiment remained positive but eased amid concerns about the impact of global geopolitical uncertainty.