Ireland’s powerhouse services sector slipped into contraction territory in April, according to AIB’s monthly Purchasing Managers’ Index released on 6 May. The headline reading fell to 49.7—the first sub-50 score in five years—driven largely by a steep drop in the transport, tourism and leisure sub-sector. Analysts link the reversal to soaring input costs tied to blockade-related shortages of jet fuel and higher freight rates following tensions in the Gulf. Airlines including Aer Lingus have already trimmed summer schedules, while hotels face double-digit energy-price rises. Falling European and UK visitor numbers add to the pressure. New business in the travel-adjacent segment declined for an eleventh time in fourteen months. Although overall business sentiment remains cautiously positive, AIB economist David McNamara warned that if oil remains above $100 per barrel, recession odds rise to 35 %. For mobility managers the data translates into tighter seat availability, higher ticket prices and potentially slimmer accommodation inventories at corporate-negotiated rates. Finance teams should budget for mid-single-digit cost inflation on air and ground transport for Ireland-based assignments through Q3. The Bank’s report also notes that many service firms are successfully passing higher costs to customers, suggesting that per-diem allowances for short-term assignees may need adjustment to reflect elevated restaurant and local-travel prices.
Source: The Irish Times
