Ireland service sector growth slows as inflation pressure still robust

(Alliance News) - The growth in Ireland's service sector slowed in April as price pressure remained "relatively strong", data from S&P Global showed Friday.

The AIB services business activity index fell to 53.3 points in April from 56.6 in March, indicating growth slowed in Irish service sector activity, as it moved towards the neutral 50-mark separating growth from contraction.

"Inflationary pressures were still historically elevated, despite an easing in input price rises, with charges for services increasing at one of the sharpest rates over the past year," S&P Global noted.

It added: "Wages and fuel were the main reported sources of higher input costs in April. The overall rate of inflation eased to a three-month low but remained above the long-run survey average."

David McNamara, AIB chief economist, said: "Overall, Irish firms continued to report rising levels of new business, and this was linked to robust domestic and international demand. The volume of outstanding work also accelerated on the month, as prior new orders growth continued to feed into current activity. At the sectoral level, all four covered in the survey registered continued growth, which was led by rapid growth in the Financial Services sector once again."

Meanwhile, the AIB Ireland composite PMI declined to 50.4 in April from 53.2 in March, indicating the "slowest expansion in the current upturn," S&P Global said. The composite data is compiled using a weighted average of the services and earlier manufacturing reading.

Numbers on Wednesday showed the manufacturing PMI declined to 47.6 in April from 49.6 in March. The contraction in April was at the steepest since July 2023.

The AIB Ireland services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies. The data were collected between April 11 and 25.

By Tom Budszus, Alliance News slot editor

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