11/3/2013: Irish Services Activity: January 2013

In an earlier post I covered annual figures for Services Index for Ireland (link here). Today's release from CSO also provides data for January 2013 (monthly series) and here is the detailed analysis of shorter-term series.

• Wholesale Trade activity index rose in January 10 118.8 from December 2012 level of 115.2 (+3.13% m/m). The index is down 1.49% y/y. 3mo average is at 117.23 up on previous 3mo average of 115.93, but down on 3mo average through January 2012 which stood at 120.47. 6mo average is 116.6 against previous 6mo average of 120.9 and a year ago 6mo average of 119.9. Thus, at 3mo average activity through January 2013 is slower than through January 2012. Ditto for 6mo average.
• Wholesale & Retail Trade, Repair of Motor Vehicles and Motorcycles activity index increased to 108.9 in January 2013 - up 1.02% m/m, but down 1.27% y/y. 3mo average through January 2013 is static compared to 3mo average through October 2012 and is down on 3mo average through January 2012. 6mo average through January 2013 is down on 6mo average through July 2012 and down on 6mo average through January 2012. Slowdown in the broader category, therefore, is more pronounced and stretched over the last 12 months than in Wholesale Trade alone.
• Transport & Storage services activity index dipped from 112.1 in December 2012 to 111.5 in January 2013, a decline of 0.54% m/m. However, the index is up 10.29% y/y. 3mo average is statistically indifferent in 3mo through January 2013 (111.3), as in 3 mo through October 2012 (111.9), but is significantly ahead of 3mo through January 2012 (101.2). 6mo average through January 2013 (111.62) is ahead of 6mo average through July 2012 and ahead of 6mo average through January 2012.
• Accommodation & Food services index declined in January 2013 to 103.5, down 1.33% m/m and marked second consecutive monthly decline. The index is up 2.38% in y/y terms. 3mo average through January 2013 is at 104.6, which is lower than 3mo average though October 2012 (105.63) but above 3mo average through January 2012 (101.6). On 6mo average basis activity through January 2013 was ahead of activity through July 2012 which itself was ahead of activity in 6 months through January 2012.
• Information & Communication services activity declined in January 2013 from 121.7 in December 2012 to 119.8 (decline of 1.56% m/m) although activity was strongly up (+11.76%) on January 2012. 3mo average through January 2013 was at 118.7, well above 3mo average through October 2012 (112.23) and 3mo average through January 2012 (108.43). Similar increases are traceable to 6mo averages.
• Professional, Scientific & Technical activities index rose to 90.2 in January from 89.4 in December 2012 (+0.89% m/m) although the index is down 1.85% y/y. 3mo average through January 2013 is at 90.53, ahead of 3mo average through October 2012 (87.83), but behind 3mo average through January 2012 (98.13). Similar dynamics can be traced across 6mo averages.
• Administrative & Support services index rose strongly from 100.7 in December 2012 to 104.2 in January 2013 (+3.48% m/m). The index is up incredible 19.63% y/y and I am at a loss as to how this can be explained given the current economic environment and fiscal consolidation. on 6mo average basis index is up from 91.88 average for 6mo through January 2012 to 102.63 average for 6mo through January 2013.

Charts to illustrate:

• Total services activity inched up to 107.9 in January 2013 from 107.7 in December 2012. Year on year, the index clocked a rise of 4.35%. 3mo average through January 2013 was at 107.57 - ahead of 3mo average a year before (105.73).

Despite these above improvements, overall services activity remains below the long-term recovery trend, albeit, owing to the strength of Wholesale Trade and ICT sectors (see the annual data analysis for these) and to the surprise uptick in Admin & Support services, the sector is tracing a shallow U-shaped recovery path so far. From January 2009, it took the index 16 months to hit the bottom, and we are 32 months into the recovery now, with still 1.55% to go (1.86% on 3mo average basis) before regaining January 2009 levels of activity. We will, barring unexpected events, close this gap in the next 2-3 months, but do keep in mind that January 2009 was already 1 year into contracting services activity in the first place.