Irish service sector bounces back from Brexit dip

New orders and job creation are on the rise...

Growth gained momentum in Ireland's services sector in December as it continues to recover from a mid-year Brexit dip.

The Investec Services Purchasing Managers' Index hit a five month-high last month - rising to 59.1. That's an improvement on the 56 recorded in November. Any value above 50 indicates expansion.

The report shows increased customer demand from both home and abroad - the 'New Business index' rose at a sharp pace.

According to today's figures the rate of job creation accelerated for the third month in a row.

Companies in the service industry experienced a sharp rise in Input Costs last month, which is attributed to rising staffing and fuel costs and the recovery of the US dollar.

The report notes that some of these increases were 'passed on' through Output Prices rising.

The New Export Business index recorded a decline for the first time in 64 months in November with "some respondents indicating that higher new business from the UK was responsible for this transition."

Philip O’Sullivan Invcestec's Chief Economist commented: "The Investec PMI data suggest that the rate of growth in activity across much of Ireland’s private sector picked up in late 2016 after the ‘soft patch’ endured in the wake of the UK’s vote for Brexit.

"While noting that political developments have the potential to put a dent in the pace of growth once again this year, we draw comfort from the fact that the Irish manufacturing and services sectors proved sufficiently resilient to continue expanding in spite of all the challenges that the past year produced."