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Irish services growth accelerates sharply, cost pressures intensify - PMI

Irish services growth accelerates sharply, cost pressures intensify - PMI
Irish services growth accelerates sharply, cost pressures intensify - PMI   -   Copyright  Thomson Reuters 2022
By Reuters

DUBLIN – Growth in Ireland’s services sector accelerated sharply last month after the lifting of almost all COVID-19 restrictions, but cost pressures intensified with both input prices and prices charged rising at the fastest rate in 21 years, a survey showed on Thursday.

The AIBIHS Markit Purchasing Managers’ Index (PMI) jumped to 61.8 in February from 56.2 in January, far above the 50 mark that separates growth from contraction and closer to the 20-year high of 66.6 recorded last July.

The index fell as low as 13.9 in April 2020 when the first lockdown was imposed.

Companies linked the boost in demand for services to the economic recovery from the pandemic, the lifting of restrictions from late January and growth in new business. Hiring grew at a faster rate despite reports of labour shortages.

However, input price inflation accelerated for the first time in four months. Service firms consequently passed on costs at the fastest rate since 2000, and at the third-strongest rate since the series began almost 22 years ago.

Data from Eurostat on Wednesday estimated that inflation across the Irish economy rose to 5.7% last month from 5% in January.