Ireland’s services sector suffered “a significant loss of momentum” at the halfway mark of 2025, according to new data from AIB.
Activity, new business and employment all rose “only modestly”, the bank said in its monthly pulse check of the sector.
Expectations in the industry remained close to post-pandemic lows, it said. International demand contracted for the first time since October 2023, while cost pressures eased to a nine-month low.
Furthermore, service providers raised their charges at the slowest rate in more than four years.
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The seasonally adjusted AIB Ireland services business activity index fell to 51.5 in June from 54.7 in May, signalling a modest rate of growth and the weakest rate since January last year. Any score above 50 indicates growth.
Only two sectors registered growth of activity in the month. Technology, media and telecoms recording a further sharp expansion of business activity, while business services posted solid results.
Transport, tourism and leisure registered a fourth successive monthly decline in activity, and at the fastest rate since October 2023. Financial services contracted for the first time since January 2021.
The weaker increase in business activity reflected a loss of momentum in growth of new work in June. The rate of expansion was among the slowest recorded in the current upturn which began in March 2021.
Similar to activity, growth in new work was limited to technology, media and telecoms, as well as business services.
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Transport, tourism and leisure posted a fourth successive decline, while financial services also recorded lower new contracts. International new business across the service economy as a whole fell for the first time since October 2023.
Companies increased their workforces at a slower rate in June, in line with weaker gains in new business and total activity.
The pace of job creation was the weakest in the current five-month period of hiring growth, and below the long-run survey average.
While financial services and business services registered moderate increases, technology, media and telecoms posted broadly no change, while transport, tourism and leisure saw only a fractional rise in staffing.
The level of outstanding business declined in June, ending a 16-month sequence of increases. Three sectors posted declines, most notably in financial services. Technology, media and telecoms recorded only a slight increase.
Average input prices increased at the weakest rate in nine months, and one that was below the long-run survey trend. Business services and technology, media and telecoms registered the softest cost pressures during the latest period.
With demand growth and cost pressures easing, service providers raised their charges at the slowest rate since April 2021. Moreover, business services registered lower charges for the first time in more than four years.
