Services firms at their most optimistic in ten years

Wednesday 05 March 2014 18.09
The Investec PMI of activity in the services sector showed a reading of 57.5 for February
The Investec PMI of activity in the services sector showed a reading of 57.5 for February

The country's services sector grew for the 19th month in a row in February and companies were at their most optimistic in ten years.

The latest Investec Purchasing Managers' Index of activity in the services sector, which covers businesses from banks to hotels and accounts for 70% of economic output, showed a reading of 57.5 for February.

That was down from 61.5 in January but still far above the 50 line that divides expansions in activity from contractions.

The sector has grown every month since July 2012, but the expansion has slowed from December, when the index hit its highest since February 2007.

But Irish companies are still markedly more optimistic about the future with nearly 65% of those surveyed forecasting higher activity in 12 months' time,  compared to just 5% expecting a fall.

"One of the most striking aspects of this release is the expectations component. Optimism among Irish services companies strengthened to the highest level recorded by the series since January 2004," Investec Ireland's chief economist Philip O'Sullivan said.

The sub-index for new export business among firms fell to 60.6 from 64.9, but marked the 31st month of growth in a row.