Irish services sector keeps up rapid growth in January

[DUBLIN The Irish services sector kept up a rapid rate of expansion in January, albeit slowing slightly from December as growth in new export business moderated to its lowest level since August, a survey showed on Monday.

The Investec Services Purchasing Managers' Index (PMI) stood at 59.8 in January compared with 60.4 in December, when it had hit an eight-month high and joined the manufacturing sector in ending 2017 on a positive note.

The sub-index measuring new export business dropped to 56.2 from 57.5 in December and respondents reported rising costs, with no easing in input cost inflation.

"Fuel, insurance, labour and raw materials prices all contributed upward pressure to firms' cost bases in January,"Investec Ireland chief economist Philip O'Sullivan said.

"Nearly a fifth of services companies raised output prices last month, with the primary motive here being to protect margins in the face of the aforementioned rising costs." The drop in the headline number was tempered by the pace of expansion in overall new business, which improved to a three-month high, with increased client demand adding to a further accumulation of outstanding business.

The index has stayed comfortably above the 50 mark that separates growth from contraction since August 2012, when Ireland was halfway through a three-year financial bailout. It has since gone on to become Europe's fastest-growing economy.

REUTERS