Services sector growth picks back up in December

Reuters

Expansion in the services sector picked up in December following four straight months of slowing growth to push overall activity in the private sector back into positive territory, a survey showed on Thursday.

The AIB S&P Global Purchasing Managers' Index (PMI) for services rose to 52.7 from 50.8 in November, when it came close to dipping below the 50 mark separating growth from contraction for the first time in 21 months.

That had pushed the Republic's composite PMI into reverse for the first time in more than two years but the overall index – which includes the currently weaker manufacturing sector – bounced back to a reading of 50.5 in December.

The pick-up in services growth last month – driven by more new business, primarily from domestic firms – was still the second-weakest reading since early 2021 and below the 53.2 recorded in October.

However it also included a further easing of input price inflation to the weakest mark in almost a year and slower growth in prices charged.

The domestic economy shrank by 1.1 per cent quarter-on-quarter between July and September, but the Department of Finance still expects growth of 7.7 per cent for 2022 as a whole following a rapid expansion earlier in the year.