7th Apr 2026 01:28
(Alliance News) - Ireland's services activity continued to expand in March, albeit at a slower pace as the Middle East war and inflationary pressures impacted the sector, S&P Global reported Tuesday.
The AIB Ireland composite purchasing managers' index fell to 52.1 points in March from 52.5 points in February.
A reading above the 50-point neutral mark indicates an overall increase in month-on-month business activity, while a reading below signals a contraction.
The AIB services PMI declined for the fourth month in a row, falling to 50.7 points in March from 51.8 points February.
David McNamara, AIB chief economist, said: "Activity levels waned amid a slowdown in new business growth, weaker hiring, and rising costs linked to the war in the Middle East."
New business activity in the services sector rose at the slowest pace in seven months with growth in new export business almost stagnant.
"The four sub-sectors covered in the survey registered weak growth or outright contraction in March. Financial services, business services and technology, media & telecoms all rose at a similar, muted pace.
"However, the transport, tourism & leisure saw a contraction in activity, exasperated by a surge in input prices related to the Middle East conflict," AIB's McNamara said.
In March, the services sector had to contend with a sharp rise in input price inflation, which hit a three-year high.
Survey respondents highlighted rising costs from fuel, energy, wages, pension contributions, raw materials, and professional services. They also noted supply chain disruptions linked to the war in the Middle East as another contributing factor.
As a result of this growing inflationary pressure, service providers raised their own prices at a stronger rate in March.
Furthermore, hiring in the services sector weakened with employment levels falling in March.
"Uncertainty linked to the impact of the war in the Middle East on the global economy and domestic consumer confidence weighed on the business outlook in March. Irish service providers expected activity to rise over the next 12 months, but the strength of sentiment was the weakest since October 2020 during the first year of the pandemic. Expectations moderated since February in all four sub-sectors," S&P Global explained.
On Wednesday, S&P Global also reported that the AIB Ireland manufacturing PMI rose to 53.7 points in March from 53.1 in the previous month.
S&P Global compiles the PMI figures each month using survey responses from a panel of 400 service sector companies and around 250 manufacturers. The composite figure is a weighted average of the services PMI and manufacturing output index.
By Elijah Dale, Alliance News senior reporter Asia-Pacific
Comments and questions to [email protected]
Copyright 2026 Alliance News Ltd. All Rights Reserved.