Tech and media firms report strong growth

04-01-2007

by Charlie Taylor

Business activity in the technology, media and telecoms sector remains strong, with firms in the area recording the sharpest growth among service providers in December.

That's according to the latest NCB Purchasing Managers' Index (PMI), which reveals that the services sector in Ireland continued to expand at a good pace last month on the back of new business growth.

Overall, the index rose slightly from 58.8 in November to 59.2 in December; however, it was at a lower level than the 62.2 average for 2006.

The data reveals that activity at technology, media and telecoms (TMT) firms increased at the sharpest pace for thirteen months in December. The business activity index shows the sector at 65.4 for December, up from 58.2 in November and ahead of activity in the financial services, business services and transport, travel, tourism and leisure sector.

Moreover, reports from firms indicate that the launch of new products contributed to the substantial rate of activity growth in the sector during the month and is seen by many as evidence of continued growth in 2007.

The index shows that the degree of confidence among firms in the sector rose from 76.9 in November to 80.5 in December. However, while TMT remains the most positive services sector, confidence is slightly below the 2006 average.

For the third time in the past five months, the TMT sector recorded the sharpest increase in new work of the four areas of service provision monitored by the survey, growing from 62.9 in November to 66.7 last month.

Additionally, in December, TMT companies registered the most marked expansion of work outstanding for 10 months and backlog growth was sharper than in any of the other three monitored service areas.

TMT companies recorded the least marked rise in costs of the four service areas covered by the survey in December. Nonetheless, input prices increased at a robust pace that was sharper than November's 16-month low of 55.3 to peak at 56.2 last month. Output prices increased for the fourth month in a row, and at a pace that was the strongest since June 2006.

Employment in the sector rose for the thirty-fifth month in a row in December, and at a robust pace. The rate of job creation rose from 55.2 in November to 56.2 last month, but was below the average for 2006.

In related news, new figures from the Irish Exporters Association indicate that exports of computers and hardware fell by 6.6 percent last year. At the same time, computer services grew by a modest 4 percent to EUR15.6 billion.