Services sector grows at second fastest rate in seven years

Wednesday 03 September 2014 19.06
Investec Purchasing Managers' Index of activity in the services sector rose to 62.4 in June from 61.3 in July
Investec Purchasing Managers' Index of activity in the services sector rose to 62.4 in June from 61.3 in July

Activity in the country's services sector grew in August at a rate just short of the seven-year high hit in June, although concern about the global economy dented confidence among firms in the sector. 

The Investec Purchasing Managers' Index of activity in the services sector, which covers businesses from banks to hotels, rose to 62.4 in June from 61.3 in July.

This left it just short of June's 62.6 - the highest reading since February 2007. 

With unemployment down for eight quarters in a row, exports rebounding and consumers beginning to spend again, the economy is now expected to grow by over 3% this year. 

The services index has been above 60 for the past six months and has not fallen below the 50 point line denoting growth for two years. 

The sub-index measuring expected levels of business activity 12 months from now fell to 74.8 from 77.4, its lowest level of the year so far.

Investec Ireland chief economist Philip O'Sullivan said the dip was "unsurprising" given global geopolitical tensions. 

But over half of companies surveyed still forecast activity would be higher than current levels in 12 months' time, with just 7% predicting a decline. 

"It is clear that there is strong momentum behind the bulk of Ireland's private sector at this time," O'Sullivan said.