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Irish services growth hits fresh 5-year high, cost pressures mount -PMI

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By Reuters
Irish services growth hits fresh 5-year high, cost pressures mount -PMI
Irish services growth hits fresh 5-year high, cost pressures mount -PMI   -   Copyright  Thomson Reuters 2021
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DUBLIN – Growth in activity in Ireland’s services sector increased further in June but cost pressures continued to intensify for firms with input price inflation hitting its highest level since 2008, a survey found on Monday.

The AIBIHS Markit Purchasing Managers’ Index (PMI) rose to 63.1 from 62.1 in May, the highest level in more than five years.

That is up from a 2021 low of 36.2 reported in January when the economy was back in lockdown and marked the fourth successive month the index has crossed the 50-mark separating expansion from contraction.

Ireland further eased one of Europe’s strictest shutdowns in early June by permitting outdoor dining and drinking in bars and restaurants. It has delayed plans to allow indoor service from next week due to concerns about the COVID-19 Delta variant.

While the survey’s authors said the surge in demand was driven by a release of pent-up demand as more restrictions were eased, fuel, wages, insurance, utilities, freight and Brexit-related costs were all reported to have risen during the month.

“Prices charged to customers increased at a more moderate pace, pointing to a continuing margin squeeze in the sector,” AIB Chief Economist Oliver Mangan said.