Irish service sector activity eases slightly due to Brexit concerns

Growth in Ireland's service sector slowed a little last month, a survey showed on Tuesday.

The June Irish services purchasing managers' index (PMI), compiled by Investec, showed the rate of expansion has eased slightly since May, with the headline PMI coming in at 61.2 versus 61.7 in the previous month.

Investec is a leading international, specialist-banking group with headquarters in Johannesburg, South Africa.

Investec's monthly Services PMI covers all private sector services in Ireland, excluding retail and wholesale, and provides timely data on an area of the economy that is not well covered by official figures. The data are derived from questionnaires sent to a representative panel of around 450 Irish private-sector service companies.

Investec said the survey opened on June 13 and closed on June 27, so the majority of responses were provided before the results of the UK's EU referendum were known.

It said the individual components of the services PMI suggest cautious positioning on the part of firms and their clients ahead of the vote, with most increasing at a slower pace than in the previous month.

"Some panellists expressed concerns that 'Brexit' would have a negative impact on activity, which is a view that we share," said Philip O'Sullivan, chief economist of Investec Ireland.

"We are unsurprised to see the unadjusted data suggest that, although still well in positive territory, confidence has fallen to a two year low in travel and leisure and to three year lows in both business services and technology, media and telecommunications," he said.

The latest Irish manufacturing PMI grows at a three-month high in June, increasing to 53.0 in June from 51.5 a month earlier, according to Investec. Endit