PURCHASING INDEX: The services sector showed further signs of recovery last month from the economic slowdown as business activity hit its highest level since February last year.
The NCB Purchasing Managers' Services Index rose for a fourth consecutive month to 59.0 from 57.8 in February. A reading above 50 signals growth while an index level below 50 points signals contraction.
"This report shows the service sector to be accelerating in that both overall business activity and incoming new business are showing their strongest growth since early 2001," NCB economist Mr Eunan King said.
"While employment growth is not yet accelerating at such a rate, the back-up of work outstanding will push firms to hire in the months ahead," he added.
The report found that staffing levels in the service sector saw just "slender growth" for the second successive month as employment growth remained well below activity as firms proved cautious.
But rising business activity last month was backed by further growth of new business and continued positive sentiment regarding the year ahead.
More than three-fifths of firms surveyed in March said they were optimistic about the year ahead and confident of seeing widespread economic recovery by the end of the year.
Firms also suggested that they would now be able to re-implement plans for business expansion and the roll-out of new products and services that had been postponed due to the economic uncertainty that prevailed in the second half of last year.
On the negative side, the report found the average costs faced by service sector firms continued to rise in March as the rate of inflation increased for the fifth month running.
The growth of costs reflected the sustained pressure on wage bills, higher insurance premiums, the perpetual weakness of the euro and the recent rebound in the price of oil, NCB said.
It found that the sustained growth of costs kept margins under pressure and firms reacted by continuing to raise charges.
The survey covers around 600 services companies in the Republic although it excludes the retail and wholesale trade.
