Services sector shrinks in June

The services sector shrank for the second month in a row as new business showed only a marginal rise in June.

The NCB Services Purchasing Managers' Index, which measures the health of the industry, declined slightly, falling to 49.7, just below the 50 mark that separates expansion from contraction.

The survey showed new business, which registered 50.3 on the index, was driven by a strong increase in new export orders to 54.2.

Employment also continued its downward trend, falling to 49.2 as both financial services and transport and leisure showed declines in staffing.

Although confidence fell over the month, companies said they were confident that activity would be higher than current levels in 12 months time.

Input costs continued to rise, putting pressure on firms as they once again cut output prices due to competition and in an attempt to stimulate demand. Output prices have now decreased in each of the past 47 months.