Ireland’s Services Sector Back in Contraction During September
Arslan Butt • 1 min read
Irish services sector activity experienced the first contraction in three months during September on account of a resurgence in coronavirus cases which forced the government to bring back some restrictions. The AIB IHS Services PMI dove to 45.8 for the month of September after a reading of 52.4 in August, falling below the 50-threshold indicating contraction.
The decline of 6.6 points in the reading was the third largest contraction on record after the severe fall seen earlier this year when the pandemic first struck. The contraction in Ireland’s services sector also came in line with that of the rest of the Eurozone, where the flash services PMI showed a fall from 50.5 in August to 47.6 in September.
AIB’s chief economist, Oliver Mangan, observes, “The recovery in the Irish services economy petered out in September amid rising virus cases and economic uncertainty. Companies linked weak demand to COVID-19 restrictions, economic uncertainty and difficulty in completing new sales due to longer decision-making by clients.”
All the sub-sectors of the services industry in Ireland saw a fall in business activity, with transport and tourism & leisure being the hardest hit. In addition, companies reported a steep decline in new business, with its sub-index reading falling at the fastest pace since June.