Ireland’s services sector expanded in July at its fastest rate in more than six years, marking a 12th successive month of growth as the country aims to emerge from recession and an EU/IMF bailout, a business survey showed today.
The Investec Purchasing Managers’ Index (PMI) of services sector activity improved to 57.6 from 54.9 in June – well above the 50 mark that separates growth from contraction and the highest since April 2007.
The country is being held up as Europe’s best chance for a bailout success but the economy has fallen back into recession and there is increasing inequality, making recovery dependent on a small privileged minority.
Ireland’s services sector, which includes a range of businesses running from banks to hotels, accounts for 70 percent of gross domestic product.
The July result “provides a very encouraging update on operating conditions in the Irish services sector,” said Investec Ireland chief economist Philip O’Sullivan.
“We would expect to see further encouraging services PMI readings throughout the remainder of this year and beyond.”
The index for new export business slid back from a five-month high of 58.8 hit in June but was still at 57.7, holding above the 50 growth threshold for a 24th successive month.
Ireland’s export-focussed economy desperately needs the tentative recovery being seen in the euro zone to take hold. PMI data for the bloc as a whole showed business expanded for the first time in 18 months in July, albeit very slightly.
The services slice of the euro wide index rose to 49.8 in the month compared to the 57.6 seen in Ireland.
The survey, compiled by Markit, covers all private sector services in Ireland, excluding retail and wholesale, and is based on questionnaires sent to around 600 Irish private-sector service companies. Source: Reuters