Growth in the services sector showed sharply last month to hit a four-year low in November, figures released today showed.
The NCB purchasing manager's services index recorded a level of 52.8 in November, down from the 56.5 level recorded in October.
The index has remained above the critical 50 mark, signalling expansion, since June 2003.
Dermot O'Brien, chief economist at NCB, said: "While respondents cited weakness in the construction sector as an influence, the fact that activity slowed appreciably in the wider Euro zone service sector in November suggests external influences also contributed to the Irish experience.
However, Mr O'Brien said business confidence had held up well in November in a sign that the slower activity growth is expected to be a "temporary phenomenon".
The impact of external factors such higher oil prices and the rise in salaries saw the costs index hit 65.8, the highest level in eight months.
The employment index increased only slightly, recording a reading of 51.1.