The latest AIB Services Business Activity Index grew from 55.7 to 58.4 during the month, well above the 50 threshold separating growth from contraction.
It was the twenty-sixth consecutive month of expansion and the most pronounced in 11 months.
“It points to a robust rate of growth in services activity,” said Oliver Mangan, Chief Economist at AIB.
“The Irish figure is comfortably above the flash April Services PMI readings for the Eurozone, UK and US of 56.6, 54.9 and 53.7, respectively.”
The uplift in activity came alongside a steep bump in new business, which grew at the the fastest in a year.
New export services business also recorded the steepest upturn since July of last year.
Employment in services therefore rose too, with the rate of expansion of the workforce quickening to a six-month high.
Despite the growth in employment numbers, the increase in accumulated or backlogged work was the most pronounced since October.
Service providers expect the current conditions, which are characterised by strong demand, to continue prompting an optimistic outlook.
“However, the level of confidence fell to its lowest level year-to-date amid concerns about a possible economic downturn,” said Mr Mangan.
However, operating expenses continued to rise in the services sector during the month, driven by the price of labour, leading to increased charges from companies.
“The rate of increase in cost inflation did ease to a near two year low, but remains steep,” said Mr Mangan.
“Increases in operating costs continue to be passed on in higher prices to customers, with the rate of increase in selling prices showing little change in recent months, remaining at a high level.”
Meanwhile, overall the AIB Ireland Composite Purchasing Managers’ Index remained in expansionary mode during the month.
It was driven by the growth in the services sector as manufacturing production contracted at the sharpest rate since last November.
“April data highlighted some tentative signs of easing inflationary pressures at Irish firms, with the manufacturing sector registering the first reduction in input prices since June 2020,” AIB said.