Irish services sector growth slows as input costs fall sharply Reuters

DUBLIN (Reuters) – Growth in Ireland’s services sector slowed slightly in June, nearly holding back job growth, but a sharp fall in input costs provided welcome relief for firms, a survey showed on Wednesday.

The AIB Global S&P Purchasing Managers’ Index fell to 54.2 from 55.0 in May, broadly in line with the trend for the first half of 2024, remaining above the 50-point barrier between growth and recession since March 2021.

The pace of growth was higher than the flash PMI indices for the eurozone and the UK, at 52.6 and 51.2 respectively.

Ireland’s slight slowdown in economic growth was as firms added new work at the slowest pace since January. Transport, tourism and leisure saw the biggest drop in activity since October 2023 and also shed jobs in the month.

This has led to service sector employment growth at its slowest pace in 40 months. Unemployment in Ireland is now close to a record low of 4%.

The pace of input price inflation fell to one of the fastest monthly levels in the survey’s 24-year history, reaching its lowest level since February 2021 and below the long-term trend.

The study authors said an index measuring prices charged by service firms fell to its lowest level in seven months but still remained relatively high.

The Irish central bank is forecasting that economy-wide inflation will hover around 2% this year and next, which is the European Central Bank’s target. But policymakers remain concerned about the stickiness of services inflation.