A strong surge in a key gauge of the vast US services sector in February has dovetailed with reports showing services industry in Ireland and Europe are also on the mend, lifting hopes for a swift return to growth on both sides of the Atlantic.
NCB Stockbrokers sounded an upbeat note in its monthly survey of the Irish services sector. It found that the sector expanded for the third month in a row in February with surveyed firms reporting significant growth in new business and rising optimism in the year ahead.
The US services sector also grew in February, surging to its best level since November 2000, the Institute of Supply Management (ISM), an industry trade group, said yesterday.
Its non-manufacturing index was up to 58.7 in February from 49.6 in January.
The US data, which were far more upbeat than analysts had expected, stirred hopes the world's largest economy is on the mend despite continued weakness in labour markets and a tepid outlook for jobs growth until the second half of 2002.
"At least in its early stages, this will be a jobless recovery," said Mr Ian Shepherdson, US economist at High Frequency Economics in Valhalla, New York.
Separately, the Reuters Eurozone services sector business activity index rose to 51.5, its strongest level in six months. And a parallel British index surged to 52.1, its highest point since June.
The NCB survey "reinforces the view that the slowdown of the Irish economy is behind us and robust growth rate can now resume, though not at the pace of the last five years," according to Mr Eunan King, senior economist with NCB. The Business Activity Index - complied by NCB along with the Institute of Purchasing and Materials Management - rose from 56.3 to 57.8 in February.
The survey found that firms across the four sectors monitored - business services, financial services, technology and transport - reported "solid growth of new business and strongly positive sentiment for the year ahead".
However, the firms remain cautious when making recruitment decisions and the pace of growth of employment was only marginal.
(Additional reporting by Reuters)
