Ireland's exporter growth at highest for six years
July saw the sharpest rate of expansion in the Republic's services sector activity in six years according to the latest purchasing managers' index (PMI), pushing growth in the Irish industry well ahead of the European average.
Investec's monthly services PMI hit a solid 57.6 for July – anything over 50 indicates growth. This is the industry's 12th successive month of growth and compares with June's headline figure of 54.9. It is the fastest rate of expansion since April 2007.
Because the index excludes the retail and wholesale sector, which is very influenced by the domestic economy, it is really an indicator of the increasing health of services exporters like legal or financial advisers.
"What these results really demonstrate is the resilience of Ireland's services exporters," said Investec chief economist Philip O'Sullivan. "Their industry is now showing 12 months of growth against a really tough economic background."
Ireland's headline figure came in well ahead of the eurozone July average of 49.8, itself still a clear improvement on June's 48.3.
Several positive indicators recorded in the past few months – including data that showed German factory orders and UK industrial production rose more than forecast in June – are helping to shore-up confidence in a slow but certain recovery of the European economy.
"The results are very encouraging," said Merrion Stockbrokers' chief economist Alan McQuaid. "Since two-thirds of the economy is driven by services, this indicates that recent disappointing GDP results should improve in the second half of the year.
"Still, domestic retail sales figures are not great at the moment, and they are what's key to consumers. But it can't be denied that these numbers are good, particularly in terms of employment."
Services employment increased at the fastest pace since December 2006. All four sub-sectors have added jobs each month for the past four months.
The Irish results, which gauge sentiment from the purchasing managers of around 600 Irish private-sector service companies, were split into several sub-categories. Tourism and leisure businesses led the gains, buoyed by this summer's heat wave. The increase in this activity was the first for any July since 2006 and the strongest overall in 25 months.
Irish private-sector companies that are used to gauge figures