DUBLIN (Reuters) -Ireland’s services sector expanded at the fastest pace this year in October, a rapid rebound from two months earlier when growth almost flatlined, a survey showed on Wednesday.
A sharp acceleration in new business pushed the AIB Ireland Services Business Activity Index to 56.7 in October from 53.5 in September and a 19-month low of 50.6 in August. A reading above 50 indicates growth in activity.
The rate of expansion outperformed those of the wider euro zone and UK.
Ireland’s technology, media and telecoms subset led the growth, maintaining its robust growth from September at 60.9. Business services and financial services also saw accelerated growth, with indices of 59.2 and 55.0 respectively. Transport, tourism and leisure only contracted fractionally with a subindex reading of 49.8.
Despite the surge in activity, employment grew at a slower pace than September. Notably, technology, media and telecoms firms saw the fastest decrease in employment since May 2020, despite increased output and orders.
Business confidence also dipped to a four-month low amid concerns over the sustainability of demand growth, despite optimism linked to expansion plans and rising new orders.
Input costs continued to rise sharply, driven by wage pressures, although the pace of cost inflation softened slightly. Output price inflation still accelerated for the third successive month, reaching the highest rate since May.
Inflation in the broader Irish economy has hit 2.7% over the last two months, rising above the euro zone average for the first time in almost two years. Ireland’s economy has been among the strongest performers in the bloc in recent years.
(Reporting by Padraic Halpin; Editing by Hugh Lawson)
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