September 5, 2018 / 5:15 AM / 3 months ago

Irish services growth picks up, expectations dampen - PMI

Construction cranes are seen in the Irish Financial Services Centre in Dublin, Ireland April 24, 2017. REUTERS/Clodagh Kilcoyne

DUBLIN, (Reuters) - Growth in Irish services activity picked up slightly in August, a survey showed on Wednesday, although firms’ expected levels of activity in 12 months’ time slipped to the lowest level in 12 months.

The Investec Services Purchasing Managers’ Index (PMI) rose to 58.0 from 57.4 in July, when it had touched the lowest level since a weather-hit March. The index has stood above the 50 mark that separates growth from contraction for six straight years.

While strong growth in new orders remained steady for the third successive month, the rate of expansion in those coming from abroad slowed to a five-month low and the sub-index measuring expectations fell to 69.1 from 71.4 a month earlier.

That was only the sixth time in five years that the business expectations index has fallen below the 70 mark.

A survey on Monday showed that Irish manufacturing activity gained momentum over the summer with sharp increases in new orders and output recorded in August.

“Looking ahead, although the business expectations index slowed to its lowest level since October last year, its level is consistent with strong optimism amongst service sector firms,” said Investec Ireland chief economist Philip O’Sullivan.

“Considered alongside the manufacturing PMI report, this week’s PMI releases suggest that the rate of growth in activity across much of Ireland’s private sector remains strong.”

Reporting by Padraic Halpin, Editing by Catherine Evans

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