Sharp Irish Services Downturn Eases Slightly in February – PMI

DUBLIN (Reuters) – The sharp decline in activity in Ireland’s largely locked down services sector eased slightly in February while confidence rose to the strongest level in over a year on the rollout of COVID-19 vaccines, a survey showed on Wednesday.

Ireland shut most building sites, shops and the hospitality sector from late December after a brief reopening led to a huge surge in COVID-19 infections, hospital admissions and deaths. The government has said any reopening will be very gradual, with the hospitality sector likely to remain shut until mid-summer.

The AIB IHS Markit Purchasing Managers’ Index (PMI) for services stood at 41.2 in February, a slight improvement on a reading of 36.2 recorded in January but well below the 50-mark that separates expansion from contraction.

“The Irish reading of 41.2 is well below the corresponding flash February PMI figures of 49.7 for the UK and 44.7 in the euro zone, pointing to a more extensive lockdown here,” AIB Chief Economist Oliver Mangan said.

“The PMI, though, has not plummeted to the levels seen last spring during the first lockdown,” he added, referring to the historic low of 13.9 recorded last April.

The survey contained a “ray of hope”, Mangan added, as expectations for the 12-month outlook rose sharply to the strongest level in over a year, spurred by expectations that vaccinations will lead to a gradual lifting of restrictions.

(Reporting by Graham Fahy; Editing by Catherine Evans)