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Overall, the rate of growth in the Irish services sector outperformed the eurozone, UK and US flash PMIs at 52.6, 51.1 and 55.2. The PMI is based on a survey of firms asking them about changes in the volume of business activity compared with one month previously. Any reading above 50 indicates an overall increase compared to the previous month. Chief economist at AIB David McNamara said new business grew at an accelerating pace in October “underpinned by a strong rise in new export business”. “From a sectoral perspective, three of the four sub-sectors expanded output in the month.” The services sector is divided up into four sub-sectors. Of these, technology, media, and telecoms (TMT) remained the best performing, with a PMI reading of 60.9, followed by business services with a reading of 59.2. Financial services activity growth also gathered pace, with a reading of 55, but transport, tourism and leisure registered a further decline in activity for an eighth consecutive month, with a reading of 49.8. The PMI said new exports rose at a solid pace that was broadly in line with that posted in September. “Panellists reported having secured new business in the UK and North America. Despite business activity and new orders increasing sharply, service providers raised their staffing levels only modestly and to a smaller degree than in the previous survey period,” the PMI said. Outstanding business rose for the first time in three months during October, although this was only a slight increase. Mr McNamara said employment rose in the services sector in October “albeit at a slower pace than last month”. “However, a fall in TMT staffing levels restricted the overall pace of job creation across other sectors. Indeed, TMT employment decreased at the fastest pace since May 2020, despite the rise in output and new orders in that sector,” he added. Input price inflation remained elevated owing to large wage costs. "Looking ahead, firms in the Irish services sector were less optimistic on the prospects for expansion in activity levels over the coming 12 months. Confidence dropped to a four-month low, but remained in positive territory, linked to expansion plans and hopes that new orders will continue to rise,” Mr McNamara said. Where companies were confident in the outlook for business activity, that was linked to expansion plans and hopes new orders would continue to rise. Financial services posted the strongest optimism, with the weakest in business services. However, some firms expressed worries that demand growth would not be sustained, with others noting market uncertainty. The strong growth in the services sector stands in contrast to the sluggish growth in the manufacturing sector. The manufacturing sector's PMI, published earlier this week, showed a reading of 50.9 — down from 51.8 in September.
