AIB reveals large slow down in service sector growth in June
The Irish services sector experienced a large slowdown in growth in June, but remains ahead of the rest of the eurozone and the UK
Print4 July 2025
The Irish services sector experienced a large slowdown in growth in June, but remains ahead of the rest of the eurozone and the UK, according to the latest AIB PMI.
The pace of growth in the sector declined to its lowest level since January 2024, as the rate of new business and hiring decreased.
The AIB services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies.
The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate, and business services.
Global trade tensions have been largely blamed for a drop-off in exports.
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AIB chief economist, David McNamara, went on to state, “The AIB Irish Services PMI for June showed an easing in growth in the sector, with the index dipping to 51.5 from 54.7 in May.”
“This marks the slowest pace of growth since January 2024, caused by softer output, new business, and hiring activity. Overall, the rate of growth in the Irish services sector outperformed the Eurozone and the UK flash PMIs at 50.0 and 51.3, respectively, but lagged the US services PMI at 53.1 in June.
“New business expanded at a modest pace in June, dampened by an outright decline in export orders.
“Some firms linked lower export activity to weaker US and European markets, and the impact of global trade tensions.
“From a sectoral perspective, just two of the four sub-sectors expanded in June. Technology, media & telecoms (TMT) remained the best performing of the four sub-sectors, maintaining a robust pace of growth in line with recent months, following solid growth in the business services sector.
“On the inflation front, input cost pressures eased further to the slowest rate since September 2024, and the prices charged index also decelerated to the lowest level in over four years.
He added: “Meanwhile, firms in the Irish services sector remained optimistic on the prospects for expansion in activity levels in the coming 12 months.
“However, sentiment remained close to the post-pandemic low reached in April due to ongoing geopolitical uncertainty.”
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