Services sector shrugs off recession, according to latest AIB data
Managing Director of Boann Distillery Patrick Cooney; AIB’s Head of New Business Team Dublin and East, Joanna McFadden; and AIB’s Director, New Business in Dublin and East, Aidan Finnan
The Irish services sector is showing signs of accelerating growth, apparently shrugging off official data that confirmed the economy is in recession.
New data released on Tuesday shows the services sector grew in November and the pace of growth is up on the previous month.
AIB’s monthly purchasing managers index (PMI) for services registered a reading of 54.2 in November, up from 52.6 in October. The reading is based on a wide ranging survey of private sector managers in the services sector which spans everything from banks to pubs and cafes.
Any reading over 50 shows growth while a reading under 50 marks contraction. The confirmation of growth in services comes after last week’s manufacturing PMI showed that sector stabilised in November, with a reading of 50 there among the year’s highest.
AIB chief economist Oliver Mangan said the latest results showed all four service sub-sectors registered growth, while inflationary pressures continued to ease.
“Of particular note was the acceleration in growth in new business for the first time since April and renewed rise in new export business after it had declined in October. This points to an improvement in demand conditions. Notably, there was a marked rebound in activity in the transport/tourism/leisure sector, following a four-month downturn, helped by a strong increase in new business, including from overseas,” he said.
Inflationary pressures eased further in November although not for wages, he said.
“The rate of increase, though, slowed to the lowest level since April 2021 and is now broadly in line with the long-run average. Higher operating costs are still being passed on to customers in higher selling prices, though again, the rate of increase fell to a two-and-a-half-year low.”
Overall though input price inflation dropped to a 40-month low in November, while output price inflation eased to a 35-month low.
Meanwhile, AIB itself has announced that it is providing €5m in finance to the family-run Boann Distillery to support its expansion plans in its distillery in Drogheda and a cream liqueur and bottling facility in Clonmel.
As well as manufacturing, Boann is due to complete a visitor centre at its site on the Platin Road in Drogheda next year, including a restaurant, bar, micro-brewery, retail space, meeting rooms, tasting rooms and visitor experience.
Boann Distillery produces malt and pot still whiskey and is run by Patrick and Marie Cooney, along with their family.
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