Ireland’s services sector expanded at a slightly slower pace in December, although growth in new business reached its highest level since March, according to a new survey. The AIB Global S&P Purchasing Managers’ Index (PMI) for December showed a slight dip, falling to 57.1 from November’s reading of 58.3. However, the index remains well above the neutral 50 mark that separates growth from contraction and is also above the long-term average of 55.1.
David McNamara, chief economist at AIB, highlighted that the expansion in December was primarily driven by a rapid increase in new business, alongside solid gains in outstanding business and employment. “The growth in December was underpinned by a robust rise in new business, while employment and backlogs of work also performed strongly,” McNamara said in a statement.
Despite the slower pace of growth compared to November, Ireland’s services sector outperformed both the eurozone and the UK. The eurozone’s flash PMI for services stood at 51.4, while the UK’s was at the same level. In contrast, the US services sector recorded a higher PMI of 58.5, indicating stronger growth.
The report also revealed that all four key sub-sectors of Ireland’s services industry experienced strong growth in December. Notably, the Transport, Tourism & Leisure sector emerged as the best performer, showcasing robust activity in these areas.
In terms of future business prospects, confidence in the Irish services sector improved, with nearly half of companies surveyed expecting growth over the next 12 months. The optimism for future business activity reached its highest level in ten months, signaling a positive outlook for the sector as the new year approaches.
While growth slowed slightly in December, the overall performance of Ireland’s services sector continues to demonstrate resilience, suggesting that the economy remains on solid footing despite some global economic uncertainties.