The services sector here suffered a significant setback due to the Covid-19 outbreak last month, with both activity and new work falling at the fastest rate since April 2009. That is according to the AIB Ireland Services Business Activity Index, which fell from 59.9 in February to 32.5 in March.
It found that new business from international markets dropped more than in any month since the series began in June 2002.
The survey also found that companies in the services field cut staff at the fastest rate since January 2012, reflecting the weakest expectations for activity in the sector since the first poll took place in May 2000.
“The Services PMI has sank far below the key 50 level that signals a move into contraction territory,” said Olive Mangan, Chief Economist at AIB.
“The very sudden and rapid deterioration in business conditions in March is in line with that seen in flash PMI surveys for other countries.”
Both domestic and export new orders imploded, he said, which suggests activity levels could remain low for some time.
Expectations for activity in 12 months’ time fell to their lowest level in the 20-year history of the survey, he added.
The weakest contraction in activity was in transport/tourism/leisure as the hospitality industry ground to a halt.
It registered its worst decline since February 2009.
Business Services was the sector that suffered the next largest decline.
“PMI data also show that manufacturing contracted in the month,” Mr Mangan said.
“Thus, there is little doubt that recessionary conditions have gripped the Irish economy.”
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