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Services sector sees slowest growth since May 2013 – PMI

Services sector sees slowest growth since May 2013 – PMI

The services sector grew at its slowest rate since May 2013 last month, a survey showed today, amid a softening of both foreign and domestic demand conditions.

The AIB IHS Markit Purchasing Managers’ Index (PMI) for services slipped to 53.1 in September from 54.6 in August.

While it still remains above the 50 mark that separates growth from contraction, this was the weakest rise in business activity since May 2013.

The services sector covers areas as diverse as communication, financial and business services, IT and the tourism trade.

The economy has largely weathered the disruption created by Britain’s 2016 vote to leave the European Union but increasing uncertainty around Brexit, due to happen on October 31, is starting to bite.

Total new orders increased at the weakest rate in 76 months, and export sales fell for the second time in the past three months.

AIB said that the sub-index for new business eased to 52.2 in September, a 76-month low that the survey’s authors said was due to Brexit uncertainty negatively affecting customer demand.

“The combination of weakening global activity and the growing risk of a no-deal Brexit, which has been weighing on manufacturing activity this year in Ireland, is now beginning to impact on the services sector according to the latest AIB PMI data,” the bank’s chief economist Oliver Mangan said.

“The September reading of 53.1 still represents a solid pace of growth in the services sector.

“However, recent PMI data point to a deceleration in the pace of activity in the Irish economy as the year has progressed, largely owing to external headwinds,” Oliver Mangan added.

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