Ireland’s Services Sector Contracts After Five Years of Growth, PMI Shows
April 2024 Services PMI Report Overview
First Contraction in Over Five Years
DUBLIN, May 6 (Reuters) - Ireland's services sector contracted for the first time in over five years in April as inflationary pressure caused by the Middle East conflict intensified and new business orders contracted, a survey showed on Wednesday.
PMI Figures and International Comparison
The AIB S&P Global Services Purchasing Managers' Index sank to 49.7 in April from 50.7 in March, slipping below the 50-mark that separates growth from contraction for the first time since February 2021.
That was ahead of flash Eurozone PMI at 47.4, but below U.S. and British levels.
Key Factors Behind the Downturn
Economic and Geopolitical Influences
"Economic uncertainty, higher costs and geopolitical tensions were cited as key drivers of the downturn," AIB Chief Economist David McNamara said in a statement.
Decline in New Business and Exports
New business contracted marginally in April, ending a period of rising demand that began in March 2021. New export business also fell for the first time since June last year, the survey showed.
Inflation and Cost Pressures
Rising Input Costs
Cost pressures intensified, with input price inflation accelerating to its highest since December 2022, driven by fuel, freight and energy costs as well as wage increases. Companies passed those increases on, pushing prices charged to a two-year high.
Impact on Pricing and Outlook
The 12-month outlook stayed positive but subdued, slightly above March's 65-month low.
(Reporting by Conor Humphries; Editing by Joe Bavier)
