Services sector ends 56 months of growth
Wednesday, 5 March 2008 11:51A report by NCB Stockbrokers shows that business activity and new business volumes in the services industry declined in February for the first time since May 2003.
The report draws from data from questionnaires sent to a panel of approximately 600 Irish private services companies. It covers all private sector services, with the exception of retail and wholesale.
The Business Activity Index showed activity had fallen to 48.3 last month, ending 56 months of consecutive growth.
The report says, though, that the fall below 50 can be considered 'moderate', and that similar falls in 2001 and 2003 did not result in any lasting damage to the economy.
The no-change mark of 50 has only been missed eight times since monthly data began being recoded in May 2000.
The data also revealed that, while there has been a drop off in profitability, employment has held up.
'New business, including export business, weakened. Despite some disimprovement in profitability, employment held up,' commented Eunan King, Senior Economist at NCB Stockbrokers.
'While the overall report is not upbeat, we have seen dips below the 50 level in 2001 and 2003 which did not translate into a general economic slowdown. We need to see how the next few months pan out,' he added.
