Irish services PMI (purchasing
managers' index) data increased sharply again in April to the highest since
February 2007 as new business rose at the fastest pace since September 2006 amid
a general strengthening of economic conditions. Steeper rates of expansion were
also recorded in employment and outstanding business during the month.
However, official data published in early April showed that
the CSO services index for February fell 2.9% and the annual
increase was only 1.9% while the PMI showed rises in activity and new
business - - the biggest Irish services companies Google and Microsoft
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The seasonally adjusted Business Activity
Index – which is based on a single question asking respondents to report on the
actual change in business activity at their companies compared to one month ago
– continued to increase in April, rising to 61.9 from 60.7 in the previous
month. Growth was the fastest since February 2007 and activity has now risen in
each of the past 21 months. Respondents widely linked the latest rise in
activity to higher new business.
Signs of improvement in the wider economy led
to ongoing optimism with regards to the prospects for further growth of activity
over the coming year. Sentiment was slightly higher than in the previous month.
The rate of expansion in new business
accelerated for the second month running in April, and was the sharpest since
September 2006. Some respondents mentioned signs of improvement in the housing
market, while a general strengthening of economic conditions was seen as the
main factor driving new order growth. The rate of expansion in new export orders
also quickened and was one of the fastest in the series history. A number of
respondents indicated that the UK had been a source of new business.
Rising new business led to a further
accumulation of backlogs of work, extending the current sequence of increasing
work-in-hand to 11 months. Moreover, the rate of accumulation was substantial
and the strongest since March 2007.
Service providers raised employment again as
part of attempts to cope with higher workloads. Some panellists reported that
they had needed to raise employment in order to maintain a good quality of
service for clients. The rate of job creation was substantial, and the fastest
in seven-and-a-half years.
Input price inflation quickened slightly in
April, with a number of respondents linking higher cost burdens to increased
In response to rising input costs, companies
increased their prices charged. The rise was the first in three months, but only
marginal as most panellists left their output prices unchanged.