3 Sep 2010
The expansion of Ireland’s services sector slowed in August but companies remained confident about future prospects and recorded rising orders from both home and abroad, a survey showed on Friday. The NCB services Purchasing Managers’ Index fell to 52.9 from 55.7 in July, when the sector saw the fastest rate of expansion since late 2007, but still staying above the 50 barrier separating growth from contraction. Ireland officially exited the eurozone’s deepest recession in the first quarter but doubts linger as it struggles to control the cost of bailing out banks and more fiscal tightening measures are on the way.
The strength of Irish exports has stood in contrast with weak domestic demand, with statistical data on Wednesday showing a fall in retail sales in July and rising jobless claims in August. In the services sector, the rate of job cuts accelerated in August to its fastest in three months, the PMI survey showed.
“Despite this confidence continues to filter back into the sector, with the reading rising again in August,” said Brian Devine, economist at NCB Stockbrokers. The sub-index measuring business confidence rose to 68.6 from 68.4 in July. Companies also saw an increase in new business including, importantly, from domestic clients. “Where higher activity was recorded, respondents mentioned higher new orders from both domestic and external markets,” said Markit, which compiles the data.