Services sector records strongest growth since Q2 2006
The Irish services sector continued to grow rapidly in September, according to AIB’s Purchasing Managers’ Index.
It reveals that the pace of expansion remained unchanged from the previous month, and rounded off the strongest quarter of growth since the second quarter of 2006.
New and outstanding work both continued to expand sharply, while companies in the sector posted another rise in employment levels.
However, the figures show that cost pressures in the service sector reached their highest since December 2000, while charge inflation eased slightly but remained strong.
“This saw prices charged to customers increase at their second fastest pace since February 2001,” said Oliver Mangan, AIB Chief Economist.
Activity is measured on a scale of 1 to 100 with any figure greater than 50 pointing to expansion in a particular sector.
The PMI registered 63.7 in September, unchanged since August.
“The index has been comfortably above 60 for five consecutive months”, said Mr Mangan.
“This highlights the very sharp rebound in services activity as pent-up demand is released amid the on-going easing of Covid-19 restrictions,” he added.
Over the third quarter as a whole the Index registered 64.7, the strongest quarterly average since the second quarter of 2006 and the third-highest since the series began in 2000.
The PMI shows that growth rates remained strong across all four sub-sectors.
Financial Services at 68.0 registered the fastest increase in activity – the strongest in nearly seven years.
This was followed by Business Services at 64.1 which also posted a quicker expansion than in August.
These trends were offset by slower growth in Transport, Tourism and Leisure at 61.5 and Technology, Media and Telecoms at 60.5.
Meanwhile, the data shows that companies remain confident of growth over the coming 12 months.