Services growth falls for second month

Growth in services slowed for the second consecutive month in April, the latest figures show.

The NCB Purchasing Managers' Index (PMI) for the services sector hit 58.1 last month.

Any reading above the benchmark of 50 indicates growth on the previous month, while any reading below that figure signals a fall in activity.

While last month's reading shows that services continued to expand, the rate at which it grew was slower than February or March. The index hit 62.7 in February but a dip to 61.4 followed that in March. Last month's reading of 58.1 signalled the slowest expansion since February 2005, NCB said yesterday.

The strongest area of growth was transport and tourism, which hit 62.1, followed by technology and telecoms, which reached 59.8

The weakest sector was business services, which came in at 56.1, while financial services posted a figure of 57.5.

The rate of employment growth also slowed to 54.6 in April compared with 56.8 in March. NCB said yesterday this indicates employment growth was at its weakest for two years.

New business was a key driver of growth in April, at 57.8. However, this was weaker than the 61.9 recorded in March. New order volumes helped drive last month's increase.

Commenting on the index results, Dermot O'Brien, chief economist with NCB Stockbrokers, said growth eased in April.

"The slower pace of activity growth was confined to the business services and technology, media and telecoms sectors," he said. "Slower employment growth was substantially confined to the business services sector."

He added that despite the slowdown in growth, business confidence improved, suggesting that activity will bounce back soon.

The survey covers all private sector services in the State, excluding retail and wholesale.