DUBLIN (Reuters) – Activity in Ireland’s services sector shrank in September for the first time in three months as the government reimposed some COVID-19 restrictions amid a surge in cases across Europe, a survey showed on Monday.
Ireland, one of the slowest countries in Europe to ease its initial COVID-19 lockdown, imposed new restrictions on the capital Dublin on Sept. 18, banning indoor restaurant dining and advising people to work from home and not to travel.
The AIB IHS Markit Purchasing Managers’ Index (PMI) for services dropped sharply to 45.8 in September from 52.4 the previous month, dropping below the 50-point line that separates growth from contraction.
The month-on-month decline of 6.6 points was the third-largest ever recorded after two months of double-digit falls brought the index from a 2020 high of 59.9 in February to a low of 13.9 in April.
The September drop follows a similar contraction the euro zone flash services PMI reading, which fell to 47.6 from 50.5 in August. Irish manufacturing stalled in September, with the PMI falling from 52.3 to 50.0.
“The recovery in the Irish services economy petered out in September amid rising virus cases and economic uncertainty,” AIB Chief Economist Oliver Mangan said in a statement.
“Companies linked weak demand to COVID-19 restrictions, economic uncertainty and difficulty in completing new sales due to longer decision-making by clients,” he added.
Business activity declined across all four sub-sectors monitored, with the fastest decline in transport, tourism & leisure.
The new business sub-index declined at its fastest rate since June.
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