Irish Services Sector Growth Slows to 4-Month Low

The AIB Ireland Services PMI declined slightly to 54.5 in January 2026, down from December’s 54.8, marking the softest expansion since September. The moderation in services sector growth came as new business growth slowed to a five-month low. However, new business remained broad-based across sectors, led by business services (56.8), followed by technology, media & telecoms (51.4) and transport, tourism & leisure (50.4). In response to rising new business, firms continued to increase employment at a solid pace, stronger than the long-run survey average. On prices, input cost inflation accelerated to a three-month high and remained above the long-run trend, with transport, tourism & leisure registering the fastest increase. Meanwhile, output price inflation rose to its highest level since May 2024 and was higher than the long-run survey average. Looking ahead, business sentiment remained optimistic, but moderated from December.

The AIB Ireland Services PMI dropped to 54.8 in December 2025, down from 58.5 in November, which had marked the fastest expansion in the sector since May 2022, making it the softest expansion since September. The moderation in services sector growth came as new business growth slowed to a three-month low. However, new business remained broad-based across sectors, led by financial services. Meanwhile, transport, tourism, and leisure registered a renewed decline in activity, the ninth in 2025. In response to the rise in new business, firms continued to raise employment. However, the pace of job creation remained modest in the latest period. On the price front, input cost inflation eased to a five-month low, while output price inflation accelerated to a four-month high but remained above the long-run survey average. Looking ahead, business sentiment remained optimistic, supported by investment, new product launches, recruitment, and recovering EU and UK markets.

The AIB Ireland Services PMI rose to 58.5 in November 2025, up from 56.7 in October, and remained above the long-run survey average since 2000 (55.0). This marked the fastest expansion in the sector since May 2022, as new business growth accelerated for the fourth straight month and reached its strongest level since April 2022. All four categories recorded sharp increases in new business, led by financial services, while new export orders also rose at a solid pace. In response to higher demand and anticipated company expansions, firms increased employment, with job creation rising at the fastest pace since March. On prices, input costs continued to rise, driven by higher wages, increased service and energy costs, insurance rates, and pension expenses. However, input cost inflation eased to a three-month low, while output price inflation accelerated to a ten-month high. Finally, sentiment improved, supported by stronger demand, planned business investment, and overall market optimism.