January growth in services industry highest in ten years - PMIWednesday 03 February 2016 19.23
The country's services sector grew at its fastest pace in almost a decade last month as new business in Europe's fastest growing economy expanded strongly, a survey showed today.
The Investec purchasing managers' index (PMI) of activity in services, which covers businesses from banks to hotels, rose to 64 in January from December's 61.8. This was its highest level since June 2006.
The sector has recorded over three and a half years of unbroken growth, denoted by a reading over 50.
It last fell below the 60 mark in February 2014 when the country was emerging from a three-year international bailout.
All of the monitored sectors - financial services, technology, business services media and telecoms and transport and leisure - recorded growth in new business for the 32nd month in a row.
Investec noted that the biggest increase was seen in financial services companies for the second successive month.
The jump in January in the overall index was driven by a sharp increase in the new business subindex to 66.2 from 62.7 a month earlier, only the second time it is has reached such a level in over 15 years.
Higher workloads also resulted in more job creation in the sector last month. Employment has now grown in the services sector for the past 41 months.
However, a sharp rise in input costs was seen in January as the effect of higher wages outweighed the downward impact of lower fuel costs.
Investec also noted that the Services PMI recorded the sharpest increase in profits last month since the series began in May 2006. This surpassed the previous record in July 2014.
"The sector has made a very impressive start to 2016. More than 20 times as many businesses expect to see growth in activity over the next year against those who anticipate a decline," Investec Ireland chief economist Philip O'Sullivan said.
"Taken together with Monday's manufacturing PMI report, this week's surveys suggest that the strong momentum evident across the Irish economy in 2015 has continued into the New Year," he added.
Another survey from Investec on Monday showed manufacturing activity at a six-month high in January.
But the economist also cautioned that Ireland will not be immune to any slowdown in international trade.