March service sector growth highest in three years
Levels of business activity in the Irish services economy increased strongly in March, according to the NCB Purchasing Managers’ Services Index (PMI) for the month.
The PMI recorded 60.6, compared with 58.1 in February. Any figure above 50 signals growth.
The survey covers all private sector services in Ireland, excluding retail and wholesale.
Chief Economist at NCB Stockbrokers Dermot O’Brien said: "This month’s services sector PMI provides further strong evidence on the buoyancy of the domestic economy and solid justification for expectations hat GDP growth in 2005 will better the 4.9% rate for 2004 published last week.
"The overall PMI in March was the highest since April 2002 and the new business and employment indices were among the highest is the past four years. On the negative side, cost pressures strengthened further and prices charged edged up modestly."
Surveyed firms reported that activity was stepped up to deal with higher levels of incoming new business. Increased sales efforts and greater marketing and advertising were also cited as outlets for activity.
Staffing levels in the Irish services economy posted the sharpest expansion for four months in
March. Anecdotal evidence showed that additional workers were hired principally to satisfy rising
levels of new business, and also to help develop a broader range of services.
However, the latest data indicated another sharp rise in average costs facing Irish service sector firms, reportedly due to higher staff salaries and fuel costs.
