Republic's service sector finally slows down after seven years of expansion
The Republic's service sector has posted seven solid years of growth and now the pace of gains has started to slow as the economy approaches full capacity, according to a new survey.
AIB's Service Sector Purchasing Managers Index reading for September, released yesterday, stood at 53.1, down from 54.6 in August and marked the lowest reading since May 2013.
"That said, the rate of expansion was solid, with activity increasing on a monthly basis for over seven years," AIB said in its report.
"A reading over 50 on the index still indicates an expansion from the previous month," it added.
While the outlook for manufacturing has slowed sharply thanks to slowing global trade, the services sector has remained a bright spot, even in economies like Germany whose heavy industry base of cars, chemicals and machine tools has been hit hard by the trade slowdown and the chilling effect of US President Donald Trump's trade war with China.
Ireland too has seen a fall-off in manufacturing activity, with the AIB's Manufacturing Purchasing Managers Index slowing for the first time since 2016 with the index posting a reading of 48.7 in September according to a release earlier this week.
While the drop in manufacturing activity has started to feed through into hiring in industry, AIB said that employment across the Irish service sector continued to increase during last month.
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The AIB report said that financial services were the fastest expanding sector in the month of September.
It has received a larger boost from Brexit than most other industries as a number of banks have moved their operations here so as to continue to operate in the European Union once the UK leaves.
Services exports now stand at €180bn (£160bn) a year, up from just €37.1bn (£33bn) in 2003, and now account for 45% of exports from the state.