Ireland private sector growth slows in April amid global uncertainty

(Alliance News) - Ireland's private sector activity cooled in April as services slipped into contraction, S&P Global reported Wednesday.

The AIB Ireland composite purchasing managers' index fell to 51.4 points in April from 52.1 points in March.

A reading above the 50-point neutral mark indicates an overall increase in month-on-month business activity, while a reading below signals a contraction.

Specifically, the services PMI fell to 49.7 points in April from 50.7 points in March.

David McNamara, AIB chief economist, commented: "New business contracted marginally in April for the first time since February 2021, with new export business also lower. Economic uncertainty, higher costs and geopolitical tensions were cited as key drivers of the downturn in April.

"The four sub-sectors covered in the survey registered weak growth or outright contraction in April. business services and technology, media & telecoms both expanded activity levels, with growth accelerating in the latter sector. However, financial services and transport, tourism & leisure saw a contraction in activity, exasperated by a surge in input prices related to the Middle East conflict."

Input price inflation accelerated to a 41-month high driven by fuel, freight and energy costs.

Despite the weak growth, firms in the service sector still increased staffing levels.

Irish firms remain upbeat but cautious on the impact of the Middle East conflict.

"In terms of the outlook, business sentiment remained in positive territory, However, expectations stayed at a relatively weak level. Global uncertainty, rising costs and potentially higher interest rates undermined the outlook for the next 12 months."

On Friday, S&P Global reported that manufacturing PMI rose to 54.9 points in April from 53.7 in March.

S&P Global compiles the PMI figures each month using survey responses from a panel of 400 service sector companies and around 250 manufacturers. The composite figure is a weighted average of the services PMI and manufacturing output index.

By Judy Amaca, Alliance News reporter Asia-Pacific

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