Ireland’s services sector experienced its weakest growth since January 2024, as July’s AIB Services PMI dipped to 50.9, down from 51.5 in June.
While still above the neutral 50 mark, the latest figure signals only marginal expansion, driven by sluggish new business and hiring activity.
The report, compiled by S&P Global, highlights that three of the four key service sectors recorded modest growth, with Technology, Media & Telecoms (TMT) leading at 52.2.
However, even TMT saw a significant slowdown.
Business Services and Financial Services both posted modest expansions of 51.6, while Transport, Tourism & Leisure (47.0) contracted for the fifth consecutive month.
David McNamara, AIB Chief Economist, noted: “The AIB Irish Services PMI for July shows a further easing in growth in the sector, with the index dipping to 50.9 from 51.5 in June.
“This marks the slowest pace of growth since January 2024, driven by softer output, new business and hiring activity.”
New business rose only marginally, making July one of the weakest months since the upturn began in March 2021.
Growth in international new work remained sluggish, although slightly better than June’s contraction.
Financial Services was the only sector to report a modest uptick in new business after a decline in June.
Employment continued to rise but at the slowest rate in six months, falling below the long-run survey average.
Only TMT and Financial Services reported staffing growth, while Business Services and Transport, Tourism & Leisure saw minor job cuts.
On inflation, firms faced the joint-weakest input price pressures since February 2021.
The rate of increase in average costs remained below the survey’s long-term trend.
Price increases for customers were unchanged from June’s four-year low.
Despite tepid current conditions, sentiment improved slightly.
“Despite the weak current activity level, firms in the Irish services sector remained optimistic on the prospects for expansion in activity levels over the coming 12 months, with sentiment ticking up slightly on last month,” said McNamara.
He added, “While many noted economic uncertainty, most continue to expect sales growth in the coming year.”
