Business activity in the Irish services sector increased for the 38th month in a row in July, but the rate of expansion eased from the previous month, a survey today showed.
The seasonally adjusted NCB/NTC Purchasing Managers' Index, based on a survey of about 600 companies, showed business activity at 63.1 last month, compared to 65.3 in June. But it was still well above the 50.0 threshold separating expansion from contraction.
The survey showed Irish services firms recorded a substantial rise in new business volumes in July, with growth of new work now having being recorded in each month since June 2003. Employment in the sector rose for the 35th month in a row in July.
"The rate of job-creation was sharp, albeit the least marked for four months. Firms reported that staff were hired as part of efforts to expand capacity in response to new business growth," the report's authors said.
The rate of cost inflation faced by Irish service firms remained sharp in July, the PMI found, with more than 32 per cent of firms recording a rise in input prices since June - although the rate of input price inflation eased from the previous month. However, it remained above the average for the past 12 months.
"Reports from firms suggested that higher staff salaries and fuel prices underpinned the latest rise in costs," the report said.
Higher input costs contributed to the 13th month running of rises in prices charged by Irish service providers.
Output prices rose, although the rate of charge inflation was well below the four-year high recorded in June.
Business confidence was high, and 52 per cent of firms anticipated higher activity in a year's time, the survey found. Optimism rose slightly from June's 34-month low, although it remained below the average for the past year