Services sector grows for 11th month in row

IRELAND’s services sector enjoyed growth for an 11th successive month in June, with the pace of expansion accelerating.

The rate of growth in new business and new export business quickened last month, thanks to improved sentiment among clients and stronger demand from the US and UK.

The latest Investec Purchasing Managers’ Index, which measures the health of the services sector, increased to 54.9 last month.

A figure over 50 means the sector is expanding, while anything below that signals contraction.

Investec Ireland economist Philip O’Sullivan said the latest PMI provides an encouraging update on operating conditions.

“A particular highlight is the employment component, which points to the sharpest rate of job creation since January,” Mr O’Sullivan said.

“Services firms in Ireland have been adding workers for each of the past 10 months.

“This growth is widespread, with unadjusted data for each of the four sub-sectors covered by the survey posting an increase in employment during June, the third month running in which this has been the case.”

In the UK, the services sector grew at its fastest pace for two years, with growth supported by the strongest gain in new business since June 2007.

In France, business activity fell at its slowest pace for 10 months in June.

But worrying data from Asia shows that the services sector in China was lacklustre in June as new orders grew at their weakest pace in more than four years, providing further evidence that the world’s second-largest economy was losing momentum.

Back home, the June data pointed to a marked improvement in business sentiment.

Optimism was the strongest since May 2010, with firms expecting recent rises in new business to continue over the coming year. Employment rose markedly, and at the fastest pace since January.