Irish services sector growth slips from 10 month high

Ireland’s services sector growth slipped back from a 10-month high in May but remained strong thanks to a steady flow of new orders fuelling optimism about the future, a survey showed on Tuesday.

The Investec Services Purchasing Managers' Index (PMI) slipped to 59.5 in May from 61.1 in April.

Services have not fallen below the 50 mark that separates growth from contraction since June 2012, when Ireland was halfway through a three-year international bailout.

Ireland was the best performing economy in the EU for the third year in a row last year despite concerns that it is the country most exposed to the fallout from neighbouring Britain’s vote last year to leave the bloc.

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The manufacturing PMI for May, released last week, indicated that Ireland’s manufacturing sector was growing at its fastest pace in almost two years.

Some 32 per cent of the services sector managers questioned reported a rise in activity in May while just 14 per cent reported a fall, the survey’s authors said.

And 55 per cent of respondents forecast an increase in business activity over the next 12 months compared to 6 per cent forecasting a decrease.

“Such optimism appears well-founded given the improving international backdrop,” Investec Ireland chief economist Philip O’Sullivan said.

-Reuters