- The AIB Services PMI rose to 55.4 in August, indicating strong growth.
- New business growth accelerated, while export growth moderated.
- Employment in the services sector stalled in August.
- Input cost inflation increased, driven by wages, fuel, and transport.
- The tourism and leisure sector saw its first activity increase in six months.
Tourism and leisure registered the first increase in activity for six months as growth in the Irish services sector remained robust in August, driven by stronger new business, although employment within the sector registered no increase for only the fourth time in five and a half years.
The AIB S&P Global Services Purchasing Managers’ Index (PMI) inched up to 55.4 in August from 55.2 in July, remaining above the 50 level that separates growth from contraction by the clearest distance since November 2025. Strong growth in new business accelerated following a dip in activity earlier in the year, while new export orders from abroad also rose, albeit at a more modest pace than in July. Sentiment among firms strengthened for the fifth successive month, with expectations for activity reaching the highest level in 18 months.
Despite the positive indicators for output and new business, employment levels fell at a marginal rate following several months of rapid gains. Rising wage, fuel, and transportation costs pushed cost inflation slightly higher, although this remained well below the 40-month peak reached in April and May and was broadly in line with the long-run survey average. The rate of increase in prices charged also picked up and remains well above the long-run trend level. Growth was strongest among financial services companies for the first time since February, just ahead of those in the technology, media, and telecoms sector; notably, tourism and leisure registered the first increase in activity for six months. This sectoral performance aligns with the resilience reported in the travel sector, as seen in Jet2’s booking figures.
David McNamara, chief economist at AIB, shared, “The AIB Irish Services PMI for August shows continued strong growth in the sector. Overall, the PMI rose to 55.4 from 55.2 in July. Activity levels were boosted by rising expectations. The rate of growth in the Irish services sector was well ahead of the flash European PMIs at 51.7 and 52.8, respectively, but below the US PMI at 56.8.”
