Irish services sector expands faster in May but outlook remains unclear, PMI shows
The AIB Global S&P Purchasing Managers' Index (PMI) rose to 54.7 in May from 52.8 in April, comfortably above the 50 level that separates growth from contraction and the 49.7 for the euro zone as a whole that was the bloc's first decline in six months.
Irish services firms have enjoyed more than four years of unbroken growth. Technology, media and telecoms led the way in May, followed by business and financial services. Transport, tourism and leisure declined for the third straight month.
Despite the growth in activity, job creation slowed, marking the weakest pace since January. A decline in employment among struggling transport, tourism and leisure firms and slower hiring growth in financial services offset gains elsewhere.
While cost pressures eased to an eight-month low, with input prices rising at a slower rate, service providers still increased charges at a stronger pace, driven by wage inflation.
Firms remained optimistic about growth prospects but their confidence levels improved only slightly from April's post-pandemic low, reflecting ongoing uncertainty linked to international trade relations.
Research co-authored by the Irish finance ministry found in March that Ireland's foreign multinational-focused economy faces a disproportionate hit from tariffs. The finance ministry last month downgraded its growth forecasts slightly for the domestic economy.
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He added that tariffs on pharmaceuticals will remain at 0pc until the US investigation into the sector concludes. It is expected to come to an end in two weeks. Yet trade tensions have a contagious effect that no drug can cure.
