Ireland’s services sector saw output rise at the fastest rate in 3½ years in November, according to new data.
Financial services drove the growth in the sector as optimism among decision-makers rebounded from a four-month low, hitting its highest since February.
The overall AIB Ireland Services Business Activity Index continued its recent positive streak in November, rising to 58.5, from 56.7 in October. Any figure greater than 50 indicates expansion of activity in the sector.
“New business grew at an accelerating pace in November, reaching the highest level since April 2022, underpinned by a further solid rise in new export business,” said AIB chief economist David McNamara.
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He noted that a “recent recovery in new client demand” had led to an increase in demand for Irish services, with the benefits of greater competitiveness and long-term business investment also being felt. Exports have been a significant source of growth, rising across all four subsectors.
The increased demand was matched by a “sharp” rise in employment last month in the services sector, with the rate of job creation the fastest since March – just before US president Donald Trump first announced his import tariff plan.
While the rate of staff growth was above the long-run average, the increase was not across the board. The technology, media and telecoms subsector saw staffing levels fall for the third time in the last four months despite an uptick in output and demand for their services.
This, Mr McNamara said, “offset somewhat the job creation across other sectors”, tempering the sectoral index for job creation.
Costs continue to rise for companies though the rate of input price inflation fell marginally from the six-month high in September. The transport, tourism and leisure sector reported the highest level of inflation. Prices charged by businesses in the services economy rose at the fastest rate since January.
The rate of growth in the sector is well ahead of that in other countries across the euro zone, which, at 53.1, saw a more moderate expansion in business activity. In the US, the regional index topped 55. The UK proved the laggard, with a reading of 50.5, largely stagnant.
AIB’s measure of both the Irish manufacturing and services sectors, the composite PMI output index, rose for the third month in a row – reflecting growth across the economy. It rose from 53.7 in October to 55.8 in November, largely driven by services sector expansion.
