Recovery is continuing in the services sector, with activity at its highest level for 18 months, according to the latest NCB survey of the sector. The survey points to expansion in the sector for five months in a row.
The latest results for Ireland coincide with separate surveys showing strong improvement in the US services sector and also a pick-up in the UK and Europe, providing further evidence of an international upturn.
The UK figures have added to expectation that the Bank of England will raise interest rates today, the first of the major world central banks to move rates upwards after a few years of falling borrowing costs. A rise of 0.25 of a percentage point to 3.75 in base interest rates is expected.
In Ireland, the monthly NCB survey, which covers all private sector services excluding wholesale and retail, showed a rise in the seasonally adjusted business activity index to 57.3, up from 56.9 the previous month and the highest level since April 2002. Any reading above 50 indicates the sector is expanding and the index reading has now been above this level for five consecutive months
"Confidence in the sustainability of the recovery also continues to rise and employment in the sector now looks like it is on a rising trend again," according to Mr Dermot O'Brien, chief economist at NCB Stockbrokers.
The employment index registered 51.2 in October, up from 50.4 in September and the second month of expansion. The survey, based on returns from 600 firms also showed a high level of confidence, with 58.7 per cent of respondents expecting business to be higher in a year's time compared to just 4.9 per cent anticipating a decline.
At a sectoral level, the tech, media and telecoms sector registered the strongest growth of activity in October, but there were also improvements in business services, financial services and transport, travel, tourism and leisure.
Internationally, other survey data published yesterday showed that the giant US service sector surged ahead in October and jobs increased, confounding forecasts, while separate reports on European and UK services also improved, the latest signs the global recovery is taking root.
The US report, from the Institute for Supply Management, showed the employment reading at its highest level in three years, raising hopes that Friday's payrolls report could show a moresubstantial increase than economists' tentative forecast that the US economy would add 55,000 jobs in October.
The ISM's non-manufacturing index, which covers most of the economy, rose to 64.7 in October from 63.3 in September, the seventh straight month of expansion. Economists had expected a pull-back in the sector, which includes everything from travel agencies to restaurants and construction.
"The outlook for the global service economy remains extremely positive," said Mr David Hensley of JP Morgan.Data showed business activity in the euro zone's dominant services sector near a three-year high while the UK services sector grew at its fastest rate in almost four years.
The headline index in the Reuters euro zone survey which covers around two-thirds of the region's economy, jumped to 56.0 in October from 53.6 in September, the fastest growth rate since December 2000.
