Services sector expands in month of May

The services sector maintained its positive start to the year as business activity in the State continues to grow.

The NCB Purchasing Managers' Services Index published today showed a headline figure of 56.3. A reading above 50 signals growth while an index level below 50 points signals contraction.

However, today’s report reveals a slowdown from the April figure which showed a 16-month high 60.8 in April the last in a series of four consecutive monthly increases.

Optimism for the year ahead is strong, although this is tempered by the view that the economic recovery will not necessarily be smooth. The report also notes that employment in the service sector is rising at its fastest rate since July 2001.

Demand for services remained strongly positive but the rate of expansion eased from the previous month as firms continue to operate against a background of weak capital expenditure, the report notes.

The survey covers around 600 services companies in the Republic although it excludes the retail and wholesale trade.