Company News

Contraction in Irish service sector eased in October -PMI

DUBLIN, Nov 4 (Reuters) - Ireland’s services sector contracted for the second successive month in October but at a softer pace than in September as the country struggles with a second wave of COVID-19, a survey showed on Wednesday.

The AIB IHS Markit Purchasing Managers’ Index (PMI) for services was 48.3 in October, below the 50 mark that separates expansion from contraction but an improvement on the previous month when the reading was 45.8.

Ireland tightened curbs to slow the spread of the virus in mid-September when indoor restaurant and bar service was banned in Dublin, a measure rolled out across the country on Oct. 5.

In late October, as infection rates continued to rise, the government extended the restrictions to the entire country, shutting non-essential retail and telling people not to travel more than five kilometres (3 miles) from their home.

The survey’s authors said business expectations moderated to the weakest level in five months, reflecting anxiety about the impact of the pandemic and the potential for economic disruption if neighbouring Britain fails to reach a trade deal with the European Union.

“The re-imposition of restrictions on activity is being most clearly felt in services sectors that depend on discretionary consumer spending. In particular, the transport, tourism and leisure sector posted another very weak reading for October,” AIB Chief Economist Oliver Mangan said in a statement.

Mangan said that while the 12-month outlook for the sector remained positive, business conditions could be even more challenging in November, with much of the sector now back in lockdown. (Reporting by Graham Fahy, editing by Padraic Halpin and Catherine Evans)