Ireland’s services sector saw its sharpest rise in activity in more than three years during November, according to the latest Purchasing Managers’ Index (PMI) published by AIB. The data points to robust momentum across a wide range of service industries, with business expansion, employment and new orders all improving at notable rates.
Broad-Based Growth Across Key Service Industries
The seasonally adjusted AIB Ireland Services Business Activity Index increased for the third consecutive month, reaching 58.5 in November, up from 56.7 in October. This marks the fastest rise in output since May 2022. A reading above 50 indicates that activity is growing month on month.
Financial Services led the acceleration with a score of 60.9, followed closely by Technology, Media and Telecoms at 60.3. Business Services also enjoyed strong growth, although its pace eased slightly compared to October, while Transport, Tourism and Leisure returned to expansion territory for the first time since February with a reading of 53.3.
New Business and Export Demand Strengthen
Demand conditions continued to improve, with new business increasing for the fourth consecutive month. This was the strongest expansion in new orders since April 2022, again driven primarily by Financial Services firms. Export demand also held firm, rising at a steady pace similar to the previous two months.
AIB noted that higher workloads and strong pipelines encouraged firms to scale up capacity. Staffing levels increased at the quickest rate since March and rose above the survey’s long-run average.
Hiring Accelerates Despite Mixed Performance by Sector
Employment growth was driven by rising customer demand and companies preparing for future expansion. Financial Services recorded the most significant increase in jobs. In contrast, Technology, Media and Telecoms reported a reduction in headcount for the third time in four months, showing some divergence within the sector.
Cost Pressures Remain, but Price Inflation Continues
Input costs continued to rise sharply in November, although the pace of inflation eased to a three-month low. Higher wages, energy expenses, insurance premiums and pension costs were among the main contributors.
With cost pressures still elevated and demand strengthening, many service providers increased their selling prices. Charge inflation reached its highest level since January.
Optimism Returns to the Sector
AIB Chief Economist David McNamara said the latest PMI results highlight a clear strengthening in the services economy. He noted that Ireland’s performance continues to outpace comparable readings for the eurozone (53.1), the UK (50.5) and the US (55).
Business confidence also rebounded after a dip in October, reaching its highest level since February. Firms remain upbeat about expansion opportunities over the coming year.
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