Three years of Irish services growth slows to a trickle-PMI

Three years of Irish services growth slowed to a near standstill in January with cost pressures also showing an unwelcome sign of strengthening again, a survey showed on Tuesday. The AIB Global S&P Purchasing Managers' Index (PMI) fell to 50.5 from 53.2 in December. The index has stayed above the 50 mark separating growth from contraction since March 2021 and comfortably so throughout 2023 at an average rate of 55.5.

The pace of expansion last month was the slowest since the post-pandemic bounceback began, driven by firms completing outstanding business and therefore seeing their volume of work-in-hand fall for the first time in three years.

Ireland's economy was the fastest growing in the euro zone in 2022 following a sharp post-pandemic rebound, but momentum slowed down throughout last year with activity flatlining in the third quarter.

There were mixed signs within Tuesday's release with employment picking up from December's 34-month low, new exports order growth accelerating at the fastest pace in five months and sentiment remaining above the long-run survey trend since 2000.

However input price inflation picked up for a second consecutive month, mainly due to reports of higher labour costs which were passed on to customers in the form of the highest level of prices charged in seven months.

Ireland's composite PMI remained in positive territory after manufacturing activity declined only marginally last month.