Irish Services Growth Hits 5-Month High

The AIB Ireland Services PMI increased to 54.2 in June 2026 from 50.8 in May, marking the highest reading since January. The acceleration in services activity was supported by the strongest expansion in new business in seven months, driven by recovering demand. Technology, media & telecoms remained the fastest-growing sector, recording its strongest expansion since last November. Overseas demand improved, rising at the strongest pace in seven months. However, higher levels of outstanding business partly reflected a relatively modest increase in employment, which grew at the slowest pace in three months. On the price front, input costs rose due to higher fuel, salary, freight, and supplier costs. However, input cost inflation eased to a four-month low. Looking ahead, business sentiment improved to a four-month high, supported by optimism over recovering demand, new business opportunities, marketing initiatives, and growth in product lines.

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.