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Irish services sector recovers from near six year low

Written by Business World, on 5th Mar 2019. Posted in General

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Ireland's services sector recovered in February from its weakest in almost six years, but activity remained soft ahead of Britain's exit from the European Union on March 29, a survey showed on Tuesday.

Ireland brushed aside the initial uncertainty from Britain's 2016 vote to leave the EU, posting the fastest economic growth in Europe for five straight years.

But there have been signs of weakness in recent weeks, with consumer sentiment falling to a four-year low on Monday.

The AIB services Purchasing Managers' Index (PMI) recovered to 55.9 from 54.2 in January, but February's reading was still the second weakest since October 2016. The services PMI has held above the 50 mark separating growth from contraction since 2012.

The readings for the past two months indicate that while the Irish economy will perform strongly in 2019, it is "unlikely to maintain the robust rate of economic growth seen in recent years," AIB Chief Economist Oliver Mangan said.

The survey's sub-indexes measuring prices charged, new business and outstanding business all improved, while business expectations and new export business both deteriorated in February.

"The strengthening in activity saw a rise in the backlog of orders, suggesting that there may be capacity pressures emerging in the sector," Mangan said. There are also increasing signs of inflationary pressures, he added. (Reuters)

Source: www.businessworld.ie

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