Services sector grows rapidly in October as new business soars

The country’s services sector grew rapidly in October thanks to the fastest rise in new business in over six years. The Investec Purchasing Managers’ Index (PMI) of services sector activity rose for the 15th month in a row to 60.1 in October, up from 56.8 in September.

That was far above the 50 mark that separates growth in activity from contraction and was the second-highest reading this year after August’s figure.

The sub-index for new services business also rose to 60.1, climbing from 57.4 in September, in its fastest expansion since March 2007.

“Both the new business and new export components saw their rate of expansion accelerate during October, with the UK cited as a key source of new export orders during the month,” said Investec Ireland chief economist Philip O’Sullivan.

“For some months now we have been expressing confidence that growth will accelerate into 2014 on the back of a stabilising domestic economy and improving export markets, with today’s report providing more comfort to that view,” he added.

The services sector, which covers a range of businesses running from banks to hotels, accounts for 70% of the country’s gross domestic product.

The survey covers all private sector services in Ireland, excluding retail and wholesale, and is based on questionnaires sent to around 450 Irish private-sector service companies.