Services growth slows in April as Brexit hits sales – PMI
Growth in the country’s services sector slowed in April, adding to signs that the economy began the second quarter at a more moderate pace amid the global slowdown.
The AIB services purchasing managers’ index slipped to 54.7 from 55.3 in March.
While the reading was still comfortably above the 50 mark that has separated growth from contraction since 2012, it was just above the near six-year low the series fell to in January.
The weaker expansion was driven by a fall in new orders, the sub-index for which dropped to 54.1 from 55.7, the lowest reading in two and a half years.
The services sector covers areas as diverse as communication, financial and business services, IT and the tourism trade.
“Although the rate of expansion remained solid amid reports of improved customer demand conditions both domestically and abroad, some panellists indicated that Brexit had negatively impacted on sales,” AIB’s chief economist Oliver Mangan said.
“Softer new order growth resulted in a weaker increase of backlogs. Outstanding business rose modestly in April, with the rate of accumulation easing to its slowest in 69 months,” he added.
Ireland has brushed aside the initial uncertainty from the 2016 Brexit vote, posting the fastest economic growth in the bloc for five years in a row.
However a corresponding survey for manufacturers earlier this week showed that it was growing at the slowest rate since the aftermath of the Brexit vote, also due to a moderation in new orders.
“Overall, the AIB Services PMI reading of 54.7 for April suggests that the Irish economy is continuing to expand at a good pace, though not as strong as in recent years,” Mangan said.
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