Irish service sector business expectations have dropped to their lowest levels in almost three years a survey released today indicated.
Many firms expressed concern over the impact of Brexit on the Irish services sector even though the majority of responses were collected before 23 June.
The Investec Purchasing Managers Sub-Index - which indicates the underlying sentiment of the service sector - showed that business expectations had dropped from 77.0 to 68.4. This is a level not seen since August 2013 when Ireland was still operating under an international bailout programme.
Investec Ireland chief economist Philip O’Sullivan said: “Given the more unsettled global backdrop, it is unsurprising to see that the business expectations component fell sharply in June.
“Some panellists expressed concerns that ‘Brexit’ would have a negative impact on activity, which is a view that we share.”
The headline index, which monitors the actual change in business activity compared to one month ago was almost static - at 61.2 from 61.7.
O’Sullivan indicated that the movement in this index would follow the underlying sentiment of the Irish service sector.
“We would note that the survey opened on the 13th June and closed on the 27th, so the majority of responses were provided before the results of the UK’s EU referendum were known.
“Our expectation from here is for a further moderation in the rate of growth in the sector over the coming months at least,” he said.