The AIB Composite Purchasing Managers’ Index (PMI) came in at 50.5 in December, up from 48.8 in November. As a result, the index moved above the unchanged threshold of 50.0, indicating an improvement in private sector operating conditions from the previous month.
The services sector led the improvement in the composite PMI. The services PMI rose to 52.7 in December from 50.8 in November, while the manufacturing PMI held steady at 48.7. The improvement in services was driven by higher demand, while the deterioration in manufactured goods was driven by lower demand. More positively, headcount has grown and input inflation has decreased in both sectors. Output inflation slowed in the services sector but accelerated in the manufacturing sector. Meanwhile, business sentiment remained downbeat in both sectors.
FocusEconomics panelists expect GDP to expand 2.9% in 2023, an increase of 0.2 percentage points from last month’s forecast, and 3.1% in 2024.