Ireland’s service sector grew at its fastest pace in five months in February, the AIB Global S&P Purchasing Managers’ Index (PMI) showed on Tuesday.
Growth in the sector had slowed to nearly a complete standstill in January 2024.
The PMI rose from 50.5 to 54.4 in January, according to the survey.
The index has remained above 50.0 – the level that separates growth from contraction – since March 2021.
It remained at over 50.0 throughout 2023, with an average rate of 55.5.
Irish Economy
Export orders from Europe rose at the sharpest pace in six months, which is thought to be a significant factor in February’s bounce-back.
Employment increased in the same month.
The manufacturing sector also rebounded in February, rising just above the 50.0 mark on the PMI.
Manufacturing is growing at its fastest pace since mid-2022, and Ireland’s composite PMI, measuring private-sector output, hit a 12-month high last month.
Ireland’s domestic economy growth slowed more than expected, to 0.5%, last year.
This fell far below the Department of Finance’s expectations of 2.2% growth.
The Minister for Finance, Michael McGrath, said that he expected the recent fall in inflation to support households this year.
However, Tuesday’s PMI showed an acceleration in services’ price growth for the fourth consecutive month.
Key Drivers Of Inflation
The survey showed that input prices and prices charged rose at their fastest rates in ten and 12 months, respectively, though still below the mid-2022 peak.
The key driver of inflation was wages, according to the survey authors, though the price of fuel was also highlighted by transport firms.
Transport, tourism and leisure recorded the strongest input price inflation of the sectors measured.
However, those sectors also reported the weakest charge inflation.
Read More: Irish Domestic Economic Growth Slowed More Than Expected In 2023
