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August’s data signalled a further robust increase in levels of Irish service sector business activity. The seasonally adjusted Business Activity Index has been on an upward trend throughout 2005 and, at 62.0, suggested a rate of growth only slightly less marked than the peak recorded in July. Commenting on the survey, Eunan King - Senior Economist at NCB Stockbrokers - said: "Conditions in the service sector remain buoyant with firms commenting on healthy demand supported by marketing campaigns and expanded sales teams. Confidence to invest appears strong supported by a higher volume of inquiries and successful tenders for project work." Activity and demand Levels of business activity in the Irish service sector maintained a strong upward trend in August, growing at a pace down only marginally from July. Higher activity principally reflected efforts to accommodate improved volumes of new business. However, panellists also highlighted the expansion of sales operations, fresh marketing initiatives and efforts to develop a wider range of services during the month.New business continued to rise strongly, with the rate of growth only slightly weaker than in July. Panellists commented upon healthy demand supported by marketing campaigns and the expansion of sales teams. The introduction of new products and increased advertising both reportedly had positive effects on client spending.Employment Growth of employment in the Irish service sector continued in August and has now been uninterrupted for two years. The latest round of recruitment included workers to satisfy growth of demand plus sales and marketing staff taken on to help win new business in the future.Inflationary pressures In August, average costs facing the Irish service sector rose at the sharpest pace since June 2002. The sharper increase in costs reflected the inflationary influence of high oil prices on derivative items such as fuel and energy, and improved salary awards by many firms.Service sector companies were able to pass few of their cost increases directly on to clients. Only marginal growth of average charges was recorded, as strong competition limited the ability of firms to raise selling prices.Business confidence The twelve-month outlook remained strong in August, with service providers indicating a degree of optimism broadly unchanged from the previous month. Expectations of activity growth were attributed to recently secured projects and a strong Irish economy likely to support the generation of new business. Plans for company expansion were reported, along with intentions to offer a broader range of services.© Copyright 2007 by Finfacts.com |
