Irish Services PMI Hits 3-Month High

The AIB Ireland Services PMI rose to 50.8 in May 2026 from 49.7 in April, signaling a marginal rise in activity, though it remained below its long-run trend of 55. It was the highest reading since February, supported by a renewed increase in new business. The rate of new business growth was the fastest in three months, with new export orders rising. Technology, media & telecoms posted the fastest expansion in activity, followed by business services and financial services. Employment increased at the fastest pace in four months as business activity expectations improved. On prices, input costs rose due to higher fuel costs, salary pressures, and supplier prices. However, inflation was little changed from April's 40-month high. Selling prices also rose as firms passed on higher costs to customers, though inflation eased from April's two-year high. Finally, business sentiment remained relatively subdued, reflecting geopolitical uncertainties and rising costs.

The AIB Ireland Services PMI dropped to 49.7 in April 2026 from 50.7 in March, marking the first contraction in activity since February 2021, as overall business activity declined marginally. New business was broadly unchanged, with firms citing economic uncertainty and higher costs linked to the Middle East war. Transport, tourism & leisure and financial services recorded declines, while technology, media & telecoms expanded strongly and business services rose modestly. New export orders fell for the first time since June 2025, and backlogs declined slightly amid softer demand. Employment rebounded after March’s fall, with most sectors hiring. Meanwhile, input cost inflation accelerated to its highest since December 2022, driven by fuel, freight, energy, and wage increases, pushing firms to lift charges at a two-year high pace. Sentiment remained positive but subdued, near a multi-year low, as geopolitical risks, rising costs, and interest rate concerns weighed on the outlook.

The AIB Ireland Services PMI declined to 50.7 in March 2026 from February’s 51.8, marking the softest expansion since last August, as new business growth moderated. New business fell in two sectors, financial services and transport, tourism & leisure, and rose only modestly in business services. Meanwhile, new export business across the service sector as a whole was broadly flat in March. Employment fell for only the third time in the past five years, albeit at a marginal rate. Jobs declined slightly in three sectors, with financial services posting a modest increase. On prices, input cost inflation accelerated to a three-year high, driven mainly by higher fuel, energy, wages, pension contributions, and raw material costs. Supply chain disruption due to the Middle East war also pressured prices. As a result, firms raised their selling prices. Finally, sentiment weakened to its lowest level since October 2020 due to the impact of the war in the Middle East on the global economy.