According to the AIB Purchasing Managers' Index (PMI) survey data for October of 2022, last month, service sector activity growth continued to lose momentum.
AIB said that demand growth remained strong, but below the trend shown since the second quarter of last year, however, service providers continued to expand their workforces at a solid pace as expectations picked up since September.
AIB stated that the Services Business Activity Index signalled growth for the twentieth successive month in lst month, but eased for the sixth time in seven months to signal a further loss of momentum, with the latest figure of 53.2 being down from 54.1 in September, and being the lowest over the current sequence as well as being below the long-run trend level of 55.1 for the third consecutive month.
Transport, Tourism And Leisure
According to AIB, activity in the transport, tourism and leisure (45.1) decreased for the second consecutive month , as well as at the fastest rate since February of last year.
AIB also stated that a renewed irise in new business in the transport, tourism and leisure, and faster growth in the financial services sector, was offset by slower gains in the business services and technology, media & telecoms sectors, and The slowest increase in outstanding contracts was in the transport, tourism and leisure sector.
Additionally, AIB stated that business from overseas continued to decrease in the transport, tourism and leisure sector; the weakest rise in charges was registered in the transport, tourism and leisures sector; and the transport, tourism and leisure sector registered the slowest input prices rise among the four sectors, in contrast to the trend shown during much of the past two years.
Statement By AIB Chief Economist
AIB chief economist Oliver Mangan stated, "The AIB Irish Services PMI for October showed a further loss of momentum in growth in the sector. The Business Activity Index fell to 53.2 from 54.1 in September and 54.7 in August. As in September, though, the headline business activity index was again weighed down by a weak performance by the transport/tourism/leisure sector. Meanwhile, the continued solid expansion in business activity in Ireland is in marked contrast to the trend elsewhere. The flash Services PMI readings were all in contraction territory in the US, UK and Eurozone in October, at 46.6, 47.5 and 48.2, respectively.
"The main components of the Irish survey were also quite encouraging. Growth in new business remained strong, with a notable marked rebound in new export business. There was another significant increase in backlogs of outstanding business, which firms linked to staff shortages as well as the good growth in new business. There was also a further strong rise in employment, with the rate of growth reaching a three month high.
"It is encouraging that strong readings for new business, outstanding business and employment were evident in all four sub-sectors covered in the survey. Meanwhile, firms' outlook for the next 12 months picked up from September's two year low to its highest level since July.
"Businesses across all four sub-sectors continued to experience strong upward pressure on input costs, especially energy prices and wages. These continued to be passed on to customers in the form of higher prices. However, the rate of increase in both input prices and prices charged, while still elevated, did ease in October and are off their peak levels seen earlier in the year."
