Growth in Ireland’s services sector improved last month, suggesting strong momentum in the EU’s fastest growing economy.
The Investec Services Purchasing Managers’ Index (PMI) rose to 58.3 from 57.6 in June, when it had slipped to a seven-month low. The 50 mark separates growth from contraction.
Like the wider economy, services businesses have so far proved resilient to Britain’s decision to leave the EU. The expansion last month was driven by a faster pace of growth in the new business, where the sub-index rebounded back above the 60 mark to 60.4, from 57.9 in June.
“Respondents reported higher new orders from a range of markets including the UK, US and continental Europe,” Philip O’Sullivan, the chief economist at Investec Ireland, said. “Services firms have been responding to this by hiring more staff.”
Mr O’Sullivan said that while more than nine times as many businesses expected activity to grow over the coming year versus those who foresaw a decline, the survey showed that expectations among companies weakened to an eight-month low in July, particularly among travel and leisure operators.
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“It is possible that speculation around Ireland’s post-Brexit trading relationship with the UK could be slightly dampening the mood,” he added.