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Service sector recovers at faster pace in August – PMI

ctivity in the services sector grew for the second month in a row in August, and at a slightly faster pace despite repeatedly stalled moves to fully reopen the economy. 

Ireland has opted for a more cautious exit from its coronovirus lockdown and has paused the fourth and final stage of its plan since July, keeping nightclubs and half the country’s pubs shut. 

The AIB IHS Markit Purchasing Managers’ Index (PMI) for services rose to 52.5 from 51.9 in July, marking its second month back above the 50-point line denoting growth, having sunk as low as 13.9 in April. 

But the index was still some way below February’s two-year high of 59.9, when the pandemic began to impact the country. 

While new business among firms grew for the first time since February last month, the survey’s authors cautioned that demand remained subdued with little sign of a substantial pickup in still contracting export orders. 

“The sub-components of the survey highlight that the recovery in activity still has quite some way to go.

“Only two of the four sectors covered showed activity expanding, while financial services and transport, tourism and leisure activity contracted,” AIB’s chief economist Oliver Mangan said. 

“Meanwhile, new orders remained at subdued levels, largely due to continuing weak foreign demand. The weakness in export orders was evident in all four service sub-sectors,” he added.

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