Services activity across Ireland was steady in February, as growth continued, although the rate of increase was the weakest since November.
According to the latest Investec Services PMI Ireland report, services activity is now in its 67th month of expansion, although the pace of growth has softened to the weakest since last November.
The survey shows that new business was little changed in February, pointing to a substantial pace of expansion. Panellists reported new business wins from both domestic and export markets. On the latter, around one-in-five respondents signalled higher new export orders, with the US and Europe cited as areas of strength.
Employment in the sector rose again, taking the sequence of growth to five and a half years, but on the margin side, while the rate of input cost inflation eased to a five month low, it was still elevated in the context of historical survey data. Panellists blamed salaries, insurance and fuel costs for the latest inflationary pressures.
Looking ahead, Investec economist Philip O’Sullivan said that firms are “very optimistic” on the outlook, with February’s reading the highest since September.
“This optimism is broad-based, with all four of the segments of the services sector that are captured by this survey simultaneously above 50 for a 69th successive month in February. Given the improving global economic backdrop, we think that this optimism is well-placed,” he said.
On the day after Italy took to the polls, a raft of European countries reported PMI figures, with Italy itself recording a slower rate of growth. Italy forecasts economic growth of 1.5 per cent in 2018, in line with last year’s rate which was the strongest since 2010.
It was a mixed picture across continental Europe with Spain’s service sector, which accounts for around half of total economic activity, expanding at its fastest rate in seven months in February.
French business activity softened more than first thought in the month, growing at the slowest pace in four months, although companies kept up hiring.
Elsewhere, growth in Germany’s private sector slowed in February from a month earlier but was still on track for solid expansion in the first quarter.
