Ireland's service sector continued to grow last month, though at a slightly slower rate than in November, figures released yesterday showed.

The NCB Purchasing Managers' Services Index, which surveys about 600 Irish companies, stood at 61.1 in December, well above the neutral 50 mark that indicates expansion, but below the 62.1 level recorded in November.

"The pace of expansion in the Irish private services sector remains very robust," said Dermot O'Brien, chief economist at NCB.

"New business is growing strongly, confidence is buoyant and employment growth continues to accelerate," Mr O'Brien added.

Confidence among service providers for the coming 12 months was strong, with a reading of 76.1 in December, the highest since July.

This compares with 73.7 in November.

According to the survey, 56 per cent of respondents expect to see an improvement in business activity over the coming year, while only 4 per cent anticipate a decline.

Analysts attributed the positive attitude to the planned introduction of new product ranges facilitating entry into new markets.

Confidence was highest amongst technology, media and telecommunication firms, according to the survey.

Growth in new business was also strong, though at 61.3, was again slightly below the levels recorded in November.

Many companies attributed the new business wins to the strong domestic economy and new overseas clients.

Companies also said they had been forced to take on new staff to cope with the increased workloads.

In fact, the levels of employment in the services sector grew in December for the 28th month, according to the NCB index.

Elsewhere, service providers reported a sharp rise in costs, reflecting higher wages and the cost of taking on more staff.