Growth in the service sector of the Irish economy accelerated last month as inflationary pressures eased further, according to a report that measures activity in the sector.

The AIB Ireland Services PMI recorded 54.2 in November – up from 52.6 in October. Any figure above 50 signifies growth.

“It signals a pick-up in the rate of growth in the sector during November after the pace of expansion had slowed over the previous six months,” said AIB’s chief economist Oliver Mangan.

Growth in new business

He highlighted an acceleration in growth of new business for the first time since April, as well as a rise in new export business, after a drop in October.

The survey showed a particularly strong performance in the category covering transport, tourism and leisure, which recorded growth after four months of decline.

Inflationary pressures for firms in the sector eased again in November, according to the survey.

Confidence

Mangan said that, while costs continued to rise, driven mainly by higher wages, the rate of increase slowed to the lowest level since April 2021.

“Higher operating costs are still being passed on to customers in higher selling prices, though again, the rate of increase fell to a two-and-a-half-year low," the economist pointed out.

Confidence levels among firms in the service sector rose to their highest level for six months, while employment grew at a faster rate than in October.