The services sector rallied strongly in August, putting in its best performance in 10 months, according to the latest NCB Purchasing Manager's Index.The index rose to 53.5 from 51.9 in July, staying above the crucial 50-point growth cut-off for the third successive month.
But a breakdown of the index shows that only business services breached 50 points, with financial services, technology, media and telecoms, and transport and tourism all declining.
In addition, job losses continued, with firms reporting staff cuts for the 14th month running while costs rose, albeit at a slower level than a month earlier and at the lowest since the survey began 40 months ago.
Despite this, business confidence surged to a five-month high, buoyed by the third successive rise in incoming business.
Analysts said the index proved the services sector was edging to recovery. Mr Dermot O'Brien, chief economist at NCB, said: "After three months of solid gains and with the overall activity index at its best level since November 2002, the rebound in the services sector is now beyond doubt.
"Taken together with the improvement in manufacturing signalled earlier this week by the purchasing managers' survey for that sector, the economic outlook has brightened considerably."
A breakdown of the data shows business services posted 53 on the index from 49.6 in July. Financial services fell to 40.9 from 51.7 while tech and media dipped to 47.5 from 48.7 and transport, travel and tourism was 47.6 from 48.9. Declining business was blamed chiefly on seasonal factors.
