AIB Ireland Services PMI Shows Accelerated Growth in May

The services sector in Ireland is experiencing a surge in growth, with the latest AIB Ireland services PMI indicating a significant acceleration in activity. According to the survey of Irish service providers, new business is booming, leading to an improved 12-month outlook across the sector.

Cost pressures remain high due to increases in wages and fuel prices, but charge inflation has eased to a five-month low. The AIB services business activity index for May was 55.0, up from 53.3 in April, indicating a faster pace of overall activity growth.

The growth in activity was broad-based across all sub-sectors, with technology, media & telecoms leading the way. New business continued to accelerate, with reports of additional work from existing customers and successful marketing efforts to win new clients.

Employment within services also rose in May, with overall sentiment reaching a three-month high. Optimism is linked to improved consumer demand, tourism, new services, falling inflation, and the prospect of lower interest rates.

Despite strong growth, cost pressures remain a concern, with technology, media & telecoms experiencing the strongest pressures. However, the overall rate of charge inflation remains above the long-run trend, indicating a healthy level of demand in the sector.

Overall, the services sector in Ireland is on a strong growth trajectory, outperforming the US, Eurozone, and UK in May. With the current expansionary sequence extending to three years and three months, the future looks bright for Irish service providers.