According to the AIB Purchasing Managers' Index (PMI) survey data for December of 2022, last month there were slightly faster increases in activity and new business, but growth rates were modest overall.
AIB said that firms hired staff at a weaker rate as the 12-month outlook was below-par on recession and inflation concerns, despite improving since November, but more positively, input price inflation slowed last month to the weakest for close to a year, while charge inflation eased to a four-month low but remained among the highest on record.
AIB stated that the Services Business Activity Index rose last month for the first time in five months, with the latest figure of 52.7 for December being up from 50.8 in November, but growth pace was the second-weakest registered over the current 22-month period of expansion, and the Index was below its long-run average of 55.1 for the fifth month in a row.
Transport, Tourism And Leisure
According to AIB, activity in the transport, tourism and leisure (44.0) experienced a fourth successive decline in activity last month, but at a weaker rate than the previous month, and outstanding business backlogs in the sector fell further.
AIB also stated that was a sharp fall in new overseas sales in the transport, tourism and leisure sector, and cost pressures were weakest in this sector.
Additionally, AIB stated that new business in the transport, tourism and leisure sector fell at the fastest rate in close to two years, but employment rose, the 12-month outlook brightened, input price inflation slowed
to a 20-month low and was the weakest among the monitored sectors, and charge inflation eased to a 15-month low.
Statement By AIB Chief Economist
AIB chief economist Oliver Mangan stated, "The AIB Irish Services PMI for December showed a modest pick-up in momentum in the sector, recovering some of the ground lost in November. The Business Activity Index rose to 52.7 from 50.8 in November, but this was still below the level of 53.2 recorded in October. Overall, the Irish services sector remains in expansion territory, unlike elsewhere. The flash Services PMIs readings for December in the US, UK and Eurozone, stood at 44.4, 50.0 and 49.1, respectively, well below the Irish figure.
"Service demand growth quickened in Ireland during December, while remaining modest overall, with just a marginal increase in new export business. There was only a slight increase also in backlogs of outstanding business. However, there was a further solid rise in employment, while, firms’ outlook for the next 12 months improved, recovering the ground lost in November.
"As has been the case for some months now, the Services PMI in December continued to be weighed down by a very weak performance in the transport/tourism/leisure sector. It registered a reading of 44.0 for business activity, with new business, new exports and outstanding business also posting levels well below 50. By contrast, technology/media/telecoms as well as business services, both recorded strong readings for the month.
"Businesses continued to experience strong upward pressure on input prices, with firms referencing higher utility and labour costs. The rate of increase, though, fell to an 11-month low, pointing to some easing in inflationary pressures. Higher costs continued to be passed on to customers. However, the pace of increase in charges fell to its lowest level since August, albeit this was still the tenth-highest on record."
