Irish services growth stays strong but inflation concerns hit outlook, PMI shows

What happened

Ireland’s services sector expanded for a fifth consecutive month in October, with the AIB Ireland Services Business Activity Index rising to 54.3 from 54.1 in September; readings above 50 indicate growth. New business grew for a sixth month, while rising costs and weaker company outlooks weighed on the survey.

Confirmed

Global impact / market context

Firms faced higher fuel, energy, wage and supply costs, and raised selling prices at the fastest pace since February 2023. Passing costs to customers may support revenue per sale, but it can also make demand harder to sustain and help explain the weaker outlook.

Analyst inference

The survey shows current activity expanding while future expectations deteriorate, so it points to a mixed business picture rather than a clear downturn. Export business stalled, employment growth remained modest, and cost pressures intensified, suggesting risks to sales and operating costs are moving in opposite directions.

Analyst inference

What to watch

1. Watch whether the services activity index remains above 50, the survey level separating growth from contraction, and whether new business continues to rise in coming months. Analyst inference
2. Track whether fuel, energy, wage and supply costs keep rising and whether firms continue raising prices, since both affect operating costs and customer demand. Analyst inference
3. Watch for further survey readings on export orders, employment and the 12-month outlook; the supplied article reports stalled export growth and a six-month low outlook index. Confirmed

Evidence

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