April 5, 2017 / 5:04 AM / 5 months ago

Irish services growth slows for second month, PMI shows

A boy walks into a restaurant called the Border Cafe in the the border town of Muff, Ireland February 10, 2016. REUTERS/Clodagh Kilcoyne

DUBLIN, (Reuters) - Growth in Ireland’s services sector slowed for the second month in a row in March, but confidence among businesses about future growth remained high, a survey showed on Wednesday.

The Investec Services Purchasing Managers’ Index slipped to 59.1 in March from 60.6 in February and a touch further back from a nine-month high of 61.0 in January.

Growth in Ireland’s services and manufacturing slowed after neighbouring Britain’s surprise decision last year to quit the European Union, and readings have been volatile since.

The weaker figures in March were caused by a dip in the new business sub-index to 60.6 from 62.4 and came after a survey on Monday showed growth in Irish manufacturing slowed for a third month in a row as growth in new orders weakened.

But services have not fallen below the 50 mark that separates growth from contraction since June 2012, when Ireland was halfway through a three-year international bailout. The economy has since become the best performing in the EU.

The survey’s authors said that despite the fluctuations there were signs of strong underlying confidence, with 13 times

as many companies expecting to see growth in activity over the coming year as opposed to those who anticipate a decrease.

Twenty-seven percent of panelists noted an increase in activity during March, compared with 10 percent that signalled a decrease. Some panelists mentioned that the UK had been a source of new business during March.

“While dipping to a four-month low, the forward-looking expectations index shows that services firms remain very upbeat on the sector’s prospects,” Investec Ireland chief economist Philip O‘Sullivan said.

“We would be inclined to ‘look through’ the marginal decline in the rate of growth implied by this week’s PMIs and we anticipate stronger responses later in 2017.”

Reporting by Conor Humphries, editing by Larry King

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