According to AIB, the AIB Purchasing Managers' Index (PMI) survey data for June of 2022 indicated a weakening of growth at this year's mid-point, with activity increasing at the slowest rate of 2022 to date, and new businesses growing by the least since the first month of this year.
AIB stated that the Services Business Activity Index fell to 55.6 in June from 60.2 the previous month, which indicated the weakest increase in activity since December of 2021 and completed a full quarter of slowing growth.
Transport, Tourism And Leisure
According to AIB, the second weakest growth was seen in transport, tourism and leisure (52.3), after business services, with the former experiences a notable decrease in momentum since May.
However, the transport, tourism & leisure sector experienced the fastest increase in new business, according to AIB, which also noted that the transport, tourism and leisure sector registered the fastest rates of inflation for both input prices and charges, and that recruitment was weakest in the transport, tourism and leisure sector.
Statement By AIB Chief Economist
AIB chief economist Oliver Mangan stated, "The latest AIB Irish Services PMI points to a marked deceleration in the pace of growth in the sector in June. The Business Activity Index fell to 55.6 from 60.2 in May. The index, though, remains above its long-run average and is still consistent with strong growth in activity. The Irish index is also well above the flash June Services PMIs for the Eurozone and UK of 52.8 and 53.4, respectively, as well as the US reading of 51.6.
"The moderation in the main components of the survey was nowhere near as pronounced as for total business activity. Growth in new business remained strong overall, slowing only marginally, with the rate of growth in new export business unchanged. Meanwhile, June saw the fastest increase in outstanding business in three months. There was yet another big rise in employment, though the pace of growth slipped from May’s ten-month high.
"Growth was broad based across all the four subsectors covered in the survey, with financial services and technology/media/telecoms registering the strongest rates of expansion. There with a notable loss of momentum in transport/tourism/leisure during June, although it again recorded the strongest growth rates for new business, exports and outstanding business.
"The Future Activity Index weakened again to its lowest level since October 2020. The war in Ukraine and elevated inflationary pressures continue to weigh on the outlook for activity. Meantime, businesses continued to experience severe upward pressure on input prices, in particular, fuel, energy, freight and wage costs. This in turn saw prices charged to customers rise very sharply for the fourth consecutive month."
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