18/11/2012: Irish Services Index - September 2012

Per CSO recent release (catching up with the data lags): Monthly Services Index for Ireland declined 2.9% m/m and rose 3.3% y/y in September 2012.

The dynamics were not great in m/m terms, but remain relatively firm on y/y basis:

The overall index hit second highest reading in series short history in August at seasonally adjusted 105.4 (highest reading was recorded in May 2012 at 105.9) and declined to 102.3 in September. 3mo MA through September is at a healthy 104.2, up on 103.6 3moMA through June 2012 and up on 98.7 3moMA through September 2011. In quarterly terms, 3Q 2012 ended up at 104.2, 0.6% ahead of previous quarter, marking the lowest q/q rate of growth since Q4 2011, however y/y Q3 2012 is up 5.6% - fastest growth on record so far (the records start at Q1 2011).

The slowdown in September was very broad:

In m/m terms:

• Wholesale & Retail Trade sector posted a decline of 2% to 108.7, with 3mo MA at 110.1 still ahead of previous 3moMA (through June 2012) at 108.3 and ahead of Q3 2011 of 104. 
• Wholesale Trade activity is down 5% to 118.3 in September.
• Information and Communications sector posted a massive drop of 6.7% in September 2012
• Business Services dropped 1.9% in September 2012 and posted an annual decline of -0.3%.
• Transportation & Storage declined 1.9%, although the sector is up 14.2% y/y
• Accommodation & Food sector is down 2.9% m/m and up 3.4% y/y
• Other Services declined 0.5% m/m but are still up 2.1% y/y.

Looking at more stable, quarterly data:

• Wholesale & Retail Trade sector index stood at 110.1 in Q3 2012, up 1.7% q/q and up 5.9% y/y
• Wholesale Trade index was at 122.3, up 2.2% q/q and 10.6% y/y, which suggests that Retail Trade activity was rather subdued.
• Information & Communications index was at 106.9 in Q3 2012, down 3.4% q/q and up 7% y/y. This marks the first quarter of q/q declines in the index reading since Q1 2011.
• Business Services were up 2.1% q/q and y/y in Q3 2012
• Transportation & Storage activity was up 2.7% q/q and 13.3% y/y - the fastest annual rate of growth in series history
• Accommodation & Food Services is up 3.6% q/q and 3% y/y
• Other Services activity fell 2.7% q/q in Q3 2012 and posted zero growth in y/y terms.

So overall, poor showing in September, relatively strong Q3 overall y/y performance, but a clear slowdown in growth in q/q terms. A mixed bag suggesting Services sectors are looking for some catalyst, most likely on the side of exports restart.