Employment growth hits seven-month in Ireland service sector
Staff Writer |
The Irish service sector made a positive start to the second half of the year, with both activity and new business continuing to rise sharply.
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Companies increased their staffing levels at the fastest pace in seven months in response.
Meanwhile, the rate of input cost inflation quickened and output prices rose solidly.
The current sequence of rising business activity in the Irish service sector was extended to six years in July as output rose sharply again during the month.
The headline seasonally adjusted Business Activity Index posted 57.4 in July from 59.5 in June, signalling a softer rate of expansion that was the weakest in four months.
According to respondents, strengthening economic conditions contributed to higher new orders and subsequent output growth, while improved tourism numbers were also mentioned.
Business sentiment also dipped in July, but remained strong and above the series average.
Among the factors supporting optimism regarding the 12-month outlook for activity were confidence in the wider economy, investment, marketing and product development.
Favourable business conditions supported a further rise in new orders.
The rate of expansion was substantial, despite easing slightly from June.
As with activity, new business has now risen continuously for six years.
Growth of new export business also remained sharp, with panellists reporting higher new work from key export destinations.
Strong new order growth contributed to a further increase in backlogs of work, while there were some reports of difficulties in finding suitable staff.
Furthermore, the rate of accumulation in outstanding business was faster than seen in June.
The rate of job creation quickened to a seven-month high in July as companies responded to greater workloads.
Employment has now risen in each of the past 71 months.
Latest data signalled an above-average increase in input prices, with the rate of inflation quickening for the second month running.
Panellists reported higher staff costs, alongside rising prices for beverages, fuel, insurance and rent.
Service providers responded to higher input costs by raising their output prices.
Charges were up solidly in July, with the rate of inflation little-changed from June.
The three months to July saw an acceleration in the rate of profits growth among Irish service providers, with the latest rise the fastest for almost a year.
Improvements in sales and productivity were reportedly behind the rise in profits. ■