4th Jun 2026 01:48
(Alliance News) - Ireland's services providers reported stronger growth in May as the sector benefitted from increased new business and an acceleration in job creation, S&P Global reported Thursday.
The AIB Ireland services purchasing managers' index rose to 50.8 points in May from 49.7 points in April, which had marked the first decline in activity since early 2021.
A reading above the 50.0-point neutral mark indicates an overall increase in month-on-month business activity, while a reading below signals a contraction.
David McNamara, AIB chief economist, said: "New business bounced back to growth in May following a contraction in April, while new export business also expanded once more during the month. However, the volume of outstanding work fell again in May, having declined in April, amid generally weak demand conditions."
Performance was mixed across the four sub-sectors covered by the survey.
Activity levels expanded in the technology, media and telecoms sub-sector and growth accelerated in the business services sub-sector.
Having contracted in April, activity levels in the financial services sub-sector increased.
Contrasting with the broader trend, S&P Global said the transport, tourism and leisure sub-sector "saw a further sharp fall in activity".
Job creation in the overall services sector accelerated in May to the fastest pace in four months, although workforces declined again within the transport, tourism and leisure sub-sector.
S&P Global said input cost inflation was "little-changed" from the 40-month high recorded in April and remains notably above the long-run survey average.
Survey respondents associated higher input prices with rising fuel costs, labour cost pressures, supplier price increases and inflationary trends brought about by ongoing geopolitical tensions.
These greater costs were passed on to customers as service providers hiked charges.
"The rate of charge inflation eased from April's two-year high, however," S&P Global commented.
Looking ahead, the 12-month business sentiment outlook remained positive in May and improved from the previous month across all sub-sectors apart from transport, tourism and leisure, which was at its weakest in five-and-a-half years.
Service providers expect activity levels to rise due to anticipated greater demand, expansion into new markets, new business opportunities, and ongoing business development efforts.
Additionally, the AIB Ireland composite PMI rose top 52.5 points in May from 51.4 points in April.
On Tuesday, S&P Global said the manufacturing PMI posted the highest reading in four years, rising to 55.9 points in May from 54.9 in April.
S&P Global compiles the PMI figures each month using survey responses from a panel of approximately 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
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