New business up to its highest level in eight years – Investec

Employment in the sector also grew for the 25th month in a row, according to the Investec Purchasing Managers’ Index (PMI).

The index, which covers businesses from banks to hotels, rose to 62.5 in September from 62.4 in August.

The sector has now experienced over two years of successive expansion in business activity, said Investec’s chief economist Philip O’Sullivan.

The index has been above 60 for the past seven months and has not fallen below the 50-point line denoting growth since July 2012, when the country was midway through a three-year EU/IMF bailout programme.

“The highlight of the report is a further increase in the new business index to its highest level since May 2006,” he said.

“Panellists reported that the growth in new business was a result of clients’ increased willingness to commit to new projects given signs of improvement in the Irish economy.

“Growth in new export business also accelerated during September, with the UK cited as a particular source of strength. Reflecting general confidence in the Irish economy, almost 60pc of respondents predicted that activity will be higher than current levels in 12 months’ time.”

Elsewhere backlogs of work rose on the back of substantial growth in business levels, with some firms reporting that staffing levels were insufficient to deal with the amount of work received.

“While the rate of job creation was little changed on prior months, it remained well above the series average,” Mr O’Sullivan said.

Investec said the services index, taken together with Wednesday’s manufacturing PMI report which showed solid growth in manufacturing output during September, suggests that the Irish private sector experienced a strong finish to the quarter.

“The broad-based nature of the growth in activity and the very high level of optimism among service providers lead us to reaffirm our view that the sector will continue to grow strongly into next year,” Mr O’Sullivan added.

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