Services Sector edges closer to recovery
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Services Sector edges closer to recovery
Activity at Irish service providers continued to decrease in December, but the rate of contraction eased to its weakest since February 2008.
The NCB Services Purchasing Managers index rose to 48.3 in December from 46.8 in November. Any figure below 50 means that activity still fell.
NCB says that falling new business was again the main reason for the lower activity, which has now fallen in each of the past 23 months. The index reveals that service providers remain optimistic that activity will be increase in the coming months, with positive sentiment recorded for the eighth month in a row. Organisations also expect the wider economy to improve this year.
New orders decreased at a slower pace in December, but organisations remained cautious and were reluctant to commit to new expenditure. NCB stated that contraction in new orders was seen despite the fourth increase in a row in new business from abroad.
While service providers continued to shed jobs at a phenomenal rate, the rate of job cuts slowed to the lowest level in 17 months.
The main reason for the latest drop in input costs at organisations was lower wage payments while output charges also decreased for the 17th month in a row. Organisations noted increased for new business, as well as pressure from clients to offer discounts.
“The services sector contracted once again in December, but the pace of decline continues to moderate. The drag continues to come from the domestic part of the economy as international new orders actually expanded for the fourth month in a row” commented NCB economist Brian Devine.
“While global recovery is leading Ireland out of the recession, we would expect that by the end of the first quarter of 2010 both the Gross National Product and the Gross National product will have increased.
John McCarrick
John McCarrick and Associates
11 Dunville Avenue, Rathmines
Dublin 6,Ireland
Telephone:01 4960102
Fax: 01 4973717
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