Services sector expanded again in June

Ireland’s services sector expanded faster in June as the flow of new export orders improved and most business owners expressed greater confidence about the year ahead, a business survey showed today.

The Investec Purchasing Managers’ Index (PMI) of services sector activity improved to 54.9 from 52.7 in May, well above the 50 line that separates growth from contraction, although short of the 2013 high of 56.8 hit in January.

Ireland’s services sector accounts for 70 percent of GDP, although that includes retail, wholesale and public services not covered by the Investec survey.

Investec Ireland chief economist Philip O’Sullivan described the June result as “very encouraging” and said he expected positive results over the remainder of the year.

Still, the average services PMI reading for the second quarter was 54.3, only marginally ahead of the 54.2 average in the first three months, when Irish gross domestic product shrank 0.6 percent.

The subindex for new export business hit a five-month high of 58.8.

More than 31 percent of panellists reported rises in new export orders, against just 8 percent reporting falls, with the United States and the United Kingdom cited as the sources of new business.

A subindex measuring respondents’ expectations about the services sector a year from now climbed to its highest level in more than three years.

The survey, which covers all private sector services in Ireland, excluding retail and wholesale, is based on questionnaires sent to around 600 Irish private-sector service companies. Source: Reuters